The South Korean district court has issued an arrest warrant for Ra Jeong-chan, chief executive of Korean biotech firm Nature Cell, on allegations that he manipulated stock market using false and misleading company information since 2017.

This came after the prosecution sought an arrest warrant against Ra on Friday. Ra has been under custody for interrogation since Tuesday.

The company said in a disclosure Wednesday it has nominated an acting CEO, adding that no allegations had been proven.

Ra is accused of exaggerating information to investors on stem cell treatment for osteoarthritis without surgery, called Joint Stem. South Korea’s Ministry of Food and Drug Safety had rejected the company’s request for conditional approval for the therapy option on March 16, citing the small number of experimental units in the treatment group and the lack of a control group in its clinical trial.

Prosecutors raided the company office in June after the Financial Services Commission handed over case to the prosecution.

Nature Cell shares hit the price floor to 10,650 won ($9.40) per a share since around 10 a.m., falling 30 percent in closing compared to Tuesday. The share price has been on a rollercoaster ride since November last year. Standing at 6,920 won on Oct. 31, 2017, Nature Cell share price peaked at 64,600 won in March 16 and has since drifted down. 

By Son Ji-hyoung
(consnow@heraldcorp.com)