Prosecutors have launched an investigation into former Daou Kiwoom Group chairman Kim Ik-rae on suspicions of involvement in a large-scale stock manipulation conducted through SG Securities Korea.

The Seoul Southern District Prosecutors’ Office sent investigators to the headquarters of Kiwoom Securities and Kim’s private residence in Seoul on Friday after his earlier booking on charges of violating the Capital Markets Act.

The raid focused on materials related to the plunge of shares of eight local companies following mass sell-offs through SG Securities Korea, the local branch of the Societe Generale Group of France.

On April 24, shares of the eight firms that had been steadily rising since last April suddenly plummeted.

Two days prior, Kim was found to have disposed of one-point-four million shares of Daou Data Corporation via after-hours trading, sparking speculation that he had advance awareness of stock manipulation or a plunge in share price.

Amid such speculation, Kim resigned from the posts of head of the financial conglomerate and head of the board of directors of Kiwoom Securities in May.