S.Korean dairy boss quits over claim yoghurt drink effective against COVID-19

Namyang Dairy Products

04/05/2021 05:00

By Heekyong Yang
    SEOUL, May 4 (Reuters) - The chairman of a major South
Korean dairy company stepped down on Tuesday after police
launched an investigation into the company's assertion that its
yogurt drink was effective in fighting the novel coronavirus.
    Namyang Dairy Product Co Ltd  003920.KS  Chairman Hong
Won-sik's resignation came three weeks after the initial claim
and its retraction. The sacking of the chief executive did
little to calm a consumer backlash.
    "I will resign from Namyang Dairy's chairman position to
take responsibility for all of this and I will not pass on
management to my children," Hong said in a televised public
apology. 
    Hong and his family members have a combined stake of 53.1%
of South Korea's No.3 dairy firm by revenue, according to
Namyang's regulatory filings. 
    Officials at Namyang Dairy could not be immediately reached
for comment. 
    Seoul police last week raided the company's headquarters. 
    The company claimed at a forum attended by reporters last
month that its Bulgaris yogurt drink was effective in preventing
COVID-19, sending its stock surging nearly 30%.
    South Korea's Ministry of Food and Drug Safety subsequently
issued a statement saying that Namyang had no evidence to
support its claim, and accused the company of illegally
spreading misleading information. 
    Namyang Dairy shares were up 16.3% versus the broader
KOSPI's  .KS11  0.5% decline as of 0243 GMT. 


 (Reporting by Heekyong Yang; Editing by Stephen Coates)
 ((Heekyong.Yang@thomsonreuters.com;))