An investigation into government funding has revealed that the founder of ZenenCell, Professor Kang, received approximately 2.5 billion Korean Won (around $2 million USD) in grants and investments from South Korean government agencies. This funding was provided through the Ministry of SMEs and Startups (MSS) and its affiliated public institutions, spanning from 2007 to September 2023.
The revelations come amid allegations that Professor Kang requested assistance from Kim Seung-won, a nominee for Minister of Law, to expedite the approval process for clinical trials of a COVID-19 treatment developed by ZenenCell. The total amount of government support, including grants and investments, received by Professor Kang and his associated research teams and companies has reached 2.531 billion Won.
Extensive Government Funding for ZenenCell
Data obtained from the MSS shows that Professor Kang and his collaborators were selected for seven research and development projects funded by the ministry between May 2007 and September 2023, totaling 1.4541 billion Won. Notably, four of these selections occurred after October 2021, the period when Professor Kang allegedly sought expedited review of the clinical trials from the then-Director of the Ministry of Food and Drug Safety.
Specific funding details include:
- In July and September 2022, Professor Kang’s ventures were awarded 280 million Won each from the Startup Growth Technology Development Project, totaling 560 million Won.
- In 2023, two projects under the Health Functional Food Development Support Program provided a combined 143.1 million Won.
Furthermore, Embios Therapeutics, a company represented by Professor Kang, secured 577 million Won through four startup support programs from the MSS between 2019 and 2022.
Support from the Korea Technology Finance Corporation (KIBO)
Beyond direct grants, ZenenCell also received significant financial backing, including guarantees and investments, from the Korea Technology Finance Corporation (KIBO), a public institution under the MSS. KIBO provided technology guarantees totaling 555 million Won, including 285 million Won in March 2017 and 270 million Won in October 2018. These guarantees are designed to help companies with insufficient collateral secure bank loans.
KIBO also made a direct investment of 500 million Won in ZenenCell in May 2017, acquiring a 0.67% stake in the company at the time. As of November 11th of the current year, 500 million Won of this investment remains outstanding.
The technology guarantees were eventually dissolved in February 2022 after ZenenCell fully repaid the associated loans.
Total Funding and Official Statements
Cumulatively, the support and investment received by Professor Kang’s entities from the MSS and KIBO, excluding the technology guarantees, amounts to 2.531 billion Won.
The MSS stated that all selected projects underwent a competitive bidding process. Regarding KIBO’s involvement, an official explained that decisions on guarantees and investments are made after a comprehensive review of a company’s technological capabilities, market potential, business viability, creditworthiness, and profitability.
Call for Scrutiny
Member of the National Assembly Lee Man-hee expressed concern over the substantial government funding provided to entities associated with an individual facing allegations of seeking favors for clinical trial approvals. “Given that it has been confirmed that tens of billions of Won in government support were provided to the company related to the person suspected of requesting expedited clinical trial approval, a thorough investigation into the entire process of support and selection is necessary,” Lee stated.
The revelations prompt questions about the oversight and transparency of government grant and investment processes, particularly when individuals involved are also subject to scrutiny for potential impropriety.
