Employee of S.Korea's Osstem arrested in embezzlement scandal, delisting risk looms
06/01/2022 05:42
By Joori Roh
SEOUL, Jan 6 (Reuters) - South Korean police have arrested
an employee of dental implant maker Osstem Implant 048260.KQ
who has been accused of embezzling millions of dollars in
company funds, with the scandal putting the firm at risk of
being delisted.
Seoul Gangseo Police said they arrested the man, identified
only by his surname Lee, late on Wednesday.
This comes after the implant maker sued Lee on Friday for
embezzling 188 billion won ($157 million) – 91.81% of its equity
capital, according a regulatory filing.
Trading in the company's stocks has been suspended on the
secondary KOSDAQ market since the start of the year.
"We are very sorry to inform our shareholders and customers
of the 188 billion won embezzlement and suspension of stock
trading," Osstem CEO Um Tae-kwan said on Wednesday.
"We are making every effort to retrieve the funds and
believe that most part of that can be retrieved ... therefore,
the negative impact on the financial statements is expected to
be temporary," Um added in a statement.
Reuters was unable to find contact details for Lee, while
his lawyer could not be immediately reached for comment.
Bourse operator Korea Exchange is looking into whether
Osstem needs an eligibility review that will decide whether to
allow the shares to resume trading, delist or grant the firm an
improvement period. The review lasts up to 35 days.
The company, which was founded in 1997 and made its market
debut in February 2007, is valued at around 2.04 trillion won -
the 19th biggest on the KOSDAQ.
Its stock price surged as much as 235% in 2021.
By end-2021, there were 1,532 companies listed on KOSDAQ.
The benchmark KOSPI .KS11 and junior KOSDAQ .KQ11 were
trading down 0.93% and 2.55%, respectively, as of 0529 GMT.
($1 = 1,199.0700 won)
(Reporting by Joori Roh; Editing by Himani Sarkar)
((joori.roh@thomsonreuters.com; +82 2 6936 1493;))