Capital Calls: No use crying over spilt South Korean milk

Namyang Dairy Products

04/05/2021 09:53

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
    HONG KONG, May 4 (Reuters Breakingviews) - Concise insights
on global finance.
 
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NO SACRED COWS. Namyang Dairy Products  003920.KS  stumbled into
a novel way of cleaning up a mess. Chairman Hong Won-sik
resigned  urn:newsml:reuters.com:*:nL4N2MR0IU on Tuesday amid a police probe into the
$240 million company’s since-retracted claims that its yoghurt
drink could prevent Covid-19. The share price bubbled up nearly
10% on the news.
    Many beverages such as Hindustan Unilever’s  HLL.NS 
Horlicks boast immunity-boosting benefits, but Namyang went
notably further. The head of research said last month that its
Bulgaris drink was found to be 77.8% effective in fighting the
virus behind the pandemic, according to local media.
    The curdling may run deeper. Hong’s son was sacked last
month after allegations of misusing company funds. And although
the family owns more than half of Namyang, the chairman’s mea
culpa included a vow not to hand management rights to his
children. With a market value that has tumbled 70% since a 2013
peak, a governance overhaul might help minority shareholders
milk more from their investment. (By Robyn Mak)

    On Twitter http://twitter.com/breakingviews
    
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| Editing by Pete Sweeney and Katrina Hamlin)