SEOUL– The head of South Korea’s financial regulator said Thursday that his agency will consider taking necessary action in the case that any irregularities are found at Osstem Implant Co., after one of its employees was accused of embezzling a large amount of company funds.
On Wednesday, police arrested the employee, identified only by his family name Lee, five days after the dental implant material maker sued him for misappropriating some 188 billion won (US$157.7 million). He was in charge of managing corporate funds.
It was a rare and large-scale scandal involving a company listed on the country’s tech-heavy KOSDAQ market, as the allegedly embezzled money is worth around 90 percent of the company’s equity for end-2020. Its stock trading was suspended Friday amid speculation that the company could be kicked out.
“Separate from judicial procedures, we will closely look into whether there had been any acts that disrupted the stock markets or other problems with regard to protection of investors and small shareholders,” Koh Seung-beom, chief of the Financial Services Commission (FSC), told reporters on the sidelines of his meeting with Financial Supervisory Service (FSS) chief Jeong Eun-bo in Seoul.
“We will consider taking action if any such action turns out to be necessary,” he added.
On Wednesday, Osstem Implant CEO Um Tae-kwan apologized and vowed to retrieve the money that had disappeared as much and swiftly as possible. He also reassured investors that the company has strong financial health to withstand the embezzlement scandal.
Despite the efforts to dispel concerns, market watchers remain concerned, raising the possibility that the company could be delisted from the KOSDAQ market, which could deal a blow to shareholders, of which about 44 percent are foreigners.
FSS Chairman Jeong earlier told reporters that his agency is “monitoring” for any indication that Osstem Implant might have cooked the books to conceal the alleged embezzlement.
Established in 1997, Osstem Implant is the country’s largest manufacturer of dental implants. The company also holds the largest market share in the Asia-Pacific region and is fourth in the global market.
The company posted a net profit of 31.6 billion won in the third quarter of last year on sales of 213.3 billion won on a consolidated basis. The third-quarter net profit was down 32.3 percent from the same period a year earlier.
Source: Yonhap News Agency