Former EcoPro Chairman
Dong-chae Lee was sentenced to two years in prison and detained in court, causing a sharp drop in EcoPro Group's stock price. On the 11th, the 5th Criminal Division of the Seoul High Court (led by Seo Seung-ryul) overturned the original ruling that had given Lee a suspended sentence for embezzlement of KRW 1.1 billion using undisclosed company information (violation of the Capital Market and Financial Investment Act). The court imposed a prison sentence of two years, a fine of KRW 22 billion, and a restitution of KRW 1.1872 billion. The court judged that there was a risk of Lee fleeing and ordered him to be detained.
Upon hearing this news, EcoPro Group's stocks fell sharply. EcoPro, which had been seen as a "major player in secondary batteries," had risen by 5.42% to KRW 622,000 during trading, but eventually fell by 6.78% from the previous day to close at KRW 550,000 after news of Lee's detention. This is a 32.9% drop from the all-time high of KRW 820,000 recorded on the 11th of last month. EcoPro BM and EcoPro HN also closed lower by 4.1% and 2.21%, respectively. Following the lagging of KOSDAQ's major stocks, the KOSDAQ index fell by 0.63% compared to the previous day, as investment sentiment toward secondary battery-related stocks worsened.
Earlier, Lee was indicted last year on charges of buying and selling stocks in advance and earning a profit from the price difference. Lee was accused of using a secret account to buy stocks in EcoPro BM before the information regarding the company's long-term supply contract was disclosed on the Electronic Disclosure System of the Financial Supervisory Service between January 2020 and September 2021, then reselling the shares at a higher price. Although most of the charges against Lee were found to be guilty in the first trial, the court suspended his prison sentence for three years with five years of probation and imposed a fine of KRW 35 billion after taking into account the restitution of the unfair profits.
The second trial judge, who handed down a heavier sentence than the first trial, stated that "not only is it practically impossible to recover damages, but there is also a significant difference in responsibility between the defendant and other co-defendants as the head of the corporate group." The judge added that "there is a high possibility of criticism as it could have been prevented if the defendant had been strictly supervised and instructed in advance." Lee and five current and former employees of EcoPro and its subsidiaries who were charged with him were all given prison sentences with suspended executions or fines.
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