Deutsch Motors Surges 19% After Court Rules Kim Keon-hee Not Guilty of Stock Manipulation

Deutsch Motors (067990.KQ) shares surged as much as 26% late Wednesday after a court ruled that First Lady Kim Keon-hee was not guilty of participating in stock price manipulation involving the company.

According to Korea Exchange data, Deutsch Motors was trading at 4,290 won as of 2:55 p.m., up more than 1.90% from the previous session. The stock, which had opened lower and traded flat, saw trading volume spike shortly after 2:10 p.m. following the verdict announcement, briefly jumping 19% to 5,000 won before paring gains to around 1%.

The rally was directly attributed to the easing of legal risks. The 27th Criminal Division of Seoul Central District Court ruled that even if Kim was aware of the price manipulation scheme, "it is difficult to conclude she was a co-conspirator." The court determined that regardless of whether Kim knew about the manipulation, she could not be considered to have substantially participated in the crime through functional control.

Deutsch Motors operates as a dealer for imported vehicles including BMW and Mini. However, the company has been at the center of political and social controversy for years due to its involvement in the stock manipulation case. As a result, its shares have been considered undervalued relative to fundamentals.

With the court declining to recognize Kim's alleged involvement in the manipulation conspiracy, analysts say political risks and legal uncertainties have been partially resolved. The immediate stock price reaction following the verdict reflects investor relief, market observers said.