Scales of justice placed in front of a blurry stock ticker. Special Prosecutor Min Jung-ki's past stock trading controversy raises questions about the standard of "fair investigation." Hanmi Ilbo Graphics

Political controversy is escalating following reports that Special Prosecutor Min Jung-ki made hundreds of millions of won in trading profits by selling all of his Neo Semitech shares, which he had invested in, just before the company's delisting.

The People Power Party demanded his resignation, stating it was "the same suspicion as the special prosecutor and the investigation subject," while Special Prosecutor Min countered, "It was a normal investment."

The key issue is whether undisclosed information was used and to what extent a conflict of interest can be recognized, considering the timing of public disclosure of public officials' assets from 2008-2011 and the actions taken by the Korea Exchange (KRX).

According to a comprehensive report by Hanmi Ilbo on the 18th, Special Prosecutor Min, while serving as a senior judge at the Seoul High Court, sold all of his approximately 12,000 Neo Semitech shares in mid-March 2010, just before trading was suspended, earning about 150 million won in profit.

On March 24th of the same year, the Korea Exchange decided to suspend trading for the company due to "refusal of opinion by the external auditor." Although a grace period for improvement was granted, accounting irregularities were not resolved, and delisting was finalized on August 23rd. Approximately 7,000 investors were affected.

With Special Prosecutor Min's sale timing overlapping by just a few days with the trading suspension, the use of insider information became the center of controversy.

The People Power Party immediately launched an offensive. Chief Spokesperson Park Sung-hoon criticized, "The height of hypocrisy, to make profits from the same suspicion that the investigation subject faces," and stated, "It is an unprecedented event for the special prosecutor and the investigation subject to face the same suspicions." Representative Joo Jin-woo also directly attacked, saying, "All that needs to be changed is the name Min Jung-ki in Kim Keon-hee's arrest warrant. The timeline clearly shows Min Jung-ki's use of undisclosed information."

Special Prosecutor Min's explanation differs. He stated, "I purchased the unlisted shares through an introduction from an acquaintance, not a company insider, and sold them in 2010 based on a securities firm employee's recommendation," adding, "At the time, I was completely unaware of the company's accounting issues or the reasons for delisting." Public disclosure of public officials' assets shows that 10,000 Neo Semitech shares (par value 5 million won) were reported in 2008, and after a capital increase, the holdings increased to 12,306 shares in 2010. It is recorded that he sold all of these shares in 2011, earning a profit of over 150 million won.

Some in the legal community also hold the view that "proving the charge of 'using undisclosed information' in a criminal case requires all three elements to be recognized: insider nature, non-publicity of information, and causality with the transaction. It is difficult to definitively determine whether these elements are met with the currently available documents."

However, the issue of conflict of interest is a separate matter. It is pointed out that if there is an overlap of interests between a public official's past investments and the current investigation subject, a review for recusal or exclusion from duties is necessary, even if not legally disqualifying.

The People Power Party argued, "It is against the basic principle of fairness for the special prosecutor to investigate others while scrutinizing his own past transactions," and the Reform Party demanded his resignation, stating, "The mere act of making money from the same stock as the investigation subject is a contradiction." In contrast, the Democratic Party remained reticent, saying, "It is up to Special Prosecutor Min to explain."

Meanwhile, Special Prosecutor Min is also embroiled in other controversies. In September, a discussion he had with the lawyer of Tongil Group's President Han Hak-ja at the special prosecutor's office sparked controversy regarding its appropriateness, and an investigation into the truth of the case involving a Yangpyeong County official who died amidst allegations of coercive interrogation is currently underway.

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