Prosecutors seek arrest warrant for ex-Kolon chief over drug development scandal

South Korean prosecutors on Thursday sought an arrest warrant for former Kolon Group chief Lee Woong-yeol as part of their investigation into a controversial gene therapy drug developed by a group company.

The Seoul Central District Prosecutors Office said it requested the warrant to detain Lee on charges of fraud, breach of trust and violation of the pharmaceutical affairs act.

Kolon Life Science, a unit of Kolon Group, initially received approval for Invossa, a cell and gene therapy for osteoarthritis, from the Ministry of Food and Drug Safety in 2017. But approval was revoked last year after the drugmaker was found to have falsely reported an ingredient used in the drug and violated labeling rules.

Prosecutors also believe Lee, who stepped down from the post in November 2018, is involved in alleged listing fraud related with the Invossa development.

The prosecutors are looking into suspicions that the group manipulated the accounting books of Kolon TissueGene, which had played a key role in the development of Invossa, by reflecting some of its technology export down payments into its accounting before listing the company on the tech-heavy KOSDAQ market in November 2017.

In February, the prosecutors indicted Kolon Life Science CEO Lee Woo-suk over breach of pharmaceutical affairs and capital market laws. Other Kolon executives connected to the Invossa scandal were indicted last December. (Yonhap)