Naturecell CEO arrested for stock price manipulation with arthritis treatment

By Lim Chang-won Posted : July 18, 2018, 15:47 Updated : July 18, 2018, 15:47

[Courtesy of Naturecell]

SEOUL -- The head of South Korean biotech firm Naturecell was arrested Wednesday on charges of stock price manipulation with false and exaggerated information on a stem-cell based treatment for degenerative arthritis patients.

Prosecutors said Naturecell CEO Ra Jeong-chan was accused of raking in illegal profits by arguing that clinical trial results confirmed the safety and efficacy of Jointstem, a stem cell degenerative arthritis treatment, in August last year. Ra claimed patients just need a simple injection of Jointstem instead of surgery.

Ra's announcement triggered a spike in the stock price of Naturecell, which manufactures and sells health functional food products, beverages, and stem cell cosmetics.

However, stock prices started falling in March when the Ministry of Drug and Food Safety refused to approve Jointstem due to insufficient clinical trial information. Prosecutors launched a probe on complaints from financial regulators.

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