Kim Keon-hee's 40% Profit Split Played in Court

A recording in which Mrs. Kim Keon-hee directly stated that she agreed to split the profits from trading Deutsch Motors shares with the acco...

A recording in which Mrs. Kim Keon-hee directly stated that she agreed to split the profits from trading Deutsch Motors shares with the account management company "in a 6:4 ratio" was played in court. The second trial of Mrs. Kim’s case, involving violations of the Capital Markets Act and Political Funds Act, held on the 15th under the jurisdiction of the 27th Criminal Division of the Seoul Central District Court (Presiding Judge Woo In-sung), saw former employee A, who managed Mrs. Kim’s Mirae Asset Securities account from 2004 to 2018, appear as a witness.

The special counsel team team played in court recordings of conversations between Mrs. Kim and Mr. A from November 2010, when the second stock price manipulation of Deutsch Motors occurred, to January of the following year. According to the recording, after entrusting the management of her Mirae Asset Home Trading System (HTS) account to another company, Mrs. Kim frequently checked with Mr. A how Deutsch Motors shares were being traded. It was also revealed that she discussed the profit distribution with the HTS account management company with Mr. A.

In a conversation on January 13, 2011, when Mr. A said, “(When) we purely sold all the Deutsch Motors shares, the remaining amount was 2.577 billion Korean won,” Mrs. Kim responded, “I promised to take 40% of that,” adding, “If we split it 6:4, how much should we give them? It seems like we need to give them nearly 270 million Korean won.”

The special counsel team’s perspective is that Mrs. Kim’s promise of an unusual 40% profit distribution was because she was aware of the stock price manipulation by former Chairman Kwon Oh-soo and others and expected high returns. On the other hand, Mrs. Kim’s side had refuted during the special counsel team’s investigation, stating, “There was no prior agreement on profit distribution; the account management company requested a 6:4 profit split after the profits were made.”

Mr. A also testified that he recognized Deutsch Motors shares at the time as a “stock whose price was being managed by someone.” He stated that even on days when the market index fell, the price of Deutsch Motors shares remained stable. However, when Mrs. Kim’s side asked, “If there are 100 stocks under price management, wouldn’t only a few be involved in illegal market manipulation (stock price manipulation)?” Mr. A replied, “That’s correct.”

Mrs. Kim appeared in court on that day wearing a black pantsuit, a white mask, and black horn-rimmed glasses. Her hair was down, with black hairpins holding back the sides. During the trial, which lasted from 10:10 a.m. to 4:10 p.m., Mrs. Kim made no official statements. She mostly kept her head slightly bowed, fixing her gaze on the documents on the desk while listening to the testimony. Occasionally, she nodded in response to the witness’s answers or consulted with her lawyer. Instead of moving to the Nambuguchi Detention Center, where she is detained, for lunch, she ate a meal brought from the detention center in the court’s holding cell.

In the afternoon trial, Kang Hye-kyung, who first raised suspicions of former President Yoon Suk Yeol’s couple and political broker Mr. Myung Tae-kyun’s involvement in candidate nominations, appeared as a witness. While working as a secretary to former People Power Party lawmaker Kim Young-sun, Ms. Kang had long interactions with Mr. Myung and served as deputy director of the Mirae Korea Research Institute, a polling agency effectively operated by Mr. Myung. Mrs. Kim is accused of helping former lawmaker Kim receive the party’s nomination in the June 2022 by-election in Uichang, Changwon, South Gyeongsang Province, and in return, receiving 58 opinion poll results worth 274.4 million Korean won free of charge.

Ms. Kang testified that after April 2022, she heard from Mr. Myung that “the nomination of Kim Young-sun was obtained in exchange for the opinion polls.” She testified that Mr. Myung said regarding former lawmaker Kim’s nomination, “It was a gift from Mrs. Kim.” She also stated, “Initially, he said, ‘We have to give it,’ but later, he talked about ‘waiting’ and ‘urging.’” The court asked, “Isn’t everything the witness heard from Mr. Myung, with no direct communication with Mrs. Kim or People Power Party officials?” and Ms. Kang replied, “I have had no communication.”

Meanwhile, the court had planned to call People Power Party lawmaker Yoon Sang-hyun and Reform Party leader Lee Jun-seok as witnesses this month to investigate the suspicions of Mr. Myung Tae-kyun’s involvement in candidate nominations, but the special counsel team team withdrew the application for these witnesses on that day.