Special counsel says ex-first lady made 810 million won in Deutsch Motors stock scheme

Former first lady Kim Keon Hee earned 810 million won ($583,000) in illegal profit through her role in manipulating shares of Deutsch Motors, a special counsel investigation concluded Friday.

Kim Keon Hee, wife of former President Yoon Suk Yeol, leaves the office of special counsel Min Joong-ki in Jongno District, central Seoul, on Aug. 6 after being questioned as a suspect. [YONHAP]

Former first lady Kim Keon Hee earned 810 million won ($583,000) in illegal profit through her alleged role in manipulating shares of Deutsch Motors, a special counsel investigation concluded Friday.

The special counsel, led by prosecutor Min Joong-ki, believes Kim worked with Kwon Oh-soo, a former chairman of Deutsch Motors, and Lee Jong-ho, former head of Black Pearl Investment, to inflate the automaker’s stock price between October 2010 and December 2012. Investigators believe her account was directly managed by the group and that she received a promise her losses would be covered.

'2.7 billion won'

The probe uncovered what it calls evidence of profit distribution. On Jan. 13, 2011 — during the second phase of the alleged scheme — she told a Mirae Asset Securities employee she had agreed to a 60-40 profit split, meaning she would give “almost 2.7 billion won” to another party. That same day, her bank account showed a cashier’s check withdrawal for exactly that amount.

The conversation came about 10 weeks after she transferred 2 billion won into her account with Black Pearl Investment. Prosecutors believe the withdrawal fulfilled a prearranged payout to Black Pearl, which allegedly used her account for price manipulation. Kim’s representatives say the withdrawal was unrelated, but investigators cite the matching figures and timing as proof of collaboration.

Kim Keon Hee, wife of former President Yoon Suk Yeol and a suspect in the alleged stock manipulation of Deutsch Motors, arrives at the office of the special counsel investigating her case led by Min Joong-ki in Jongno District, central Seoul, on Aug. 6. [KIM JONG-HO]

Special counsel cites ‘collaboration’

The special counsel’s office said Thursday that it sought an arrest warrant for Kim, citing her alleged conspiracy with the manipulation group. Investigators believe Kwon introduced her to key traders during both phases of the scheme; that these traders directly managed her account through discretionary trading; and that they promised to "cover any losses." Testimony to that effect has been secured, they said.

The Deutsch Motors case involved Kwon and others manipulating the automaker’s stock between 2009 and 2012, using 157 accounts in the names of 91 people. They allegedly drove the price from the 2,000-won range to over 8,000 won, reaping illegal profits.

In April, the Supreme Court upheld a three-year prison sentence with a four-year suspended term for Kwon.

Kim’s detention hearing is scheduled for Tuesday at the Seoul Central District Court. Prosecutors plan to submit the recorded phone conversation, bank withdrawal records and other materials as key evidence to argue for her arrest.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff. BY YANG SU-MIN [kim.juyeon2@joongang.co.kr]