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Embezzlement scandal

Korean dental implant maker hit by $160 mn embezzlement

Trading in Osstem Implant shares remain halted until further notice by the Korea Exchange

By Jan 03, 2022 (Gmt+09:00)

(Courtesy of Osstem Implant)
(Courtesy of Osstem Implant)


Trading in shares of South Korea's top dental implant manufacturer Osstem Implant Co. was suspended on the Kosdaq market on Monday, after the company revealed itself the victim of the largest-ever embezzlement scandal for a Korean listed company, totaling 188 billion won ($160 million).

A 45-year-old employee, identified only by his family name Lee, is alleged to have transferred the money, equivalent to 92% of the company's equity capital, to his banking and brokerage accounts. He is also accused of manipulating the company’s accounting books.

Lee is being investigated by police for the allegations, according to Osstem on Jan. 3.

“We have pressed charges against the employee and will take every measure necessary to recover the money," Osstem said in a regulatory filing.

Osstem's management was notified of the embezzlement on Dec. 31, 2021 and reported it to a police station in Seoul.

The money Lee allegedly stole from the company is nearly double the operating profit of 98.1 billion won the implant maker earned in 2020, and two-thirds of its cash and cash equivalents as of end-September 2021.

The employee accused of the fraud case joined Osstem in 2018 and has been working as a senior manager of the company's finance team.

Lee was also identified as an individual investor who made headlines after building up a 7.6% stake in Kosdaq-listed Dongjin Semichem Co. in October of last year.

Having spent about 140 billion won buying the Dongjin shares, he cashed out most of his shares in the fine chemical and electronic materials company as of Dec. 30, according to a filing by Dongjin.

With market capitalization of 2 trillion won, Osstem's share price nearly trebled last year to close at 142,700 won, compared with 51,000 won a year earlier.

Established in 1997, Osstem has been increasing its market share in the dental care products market. It is aiming to be the world's No. 1 dental care products maker by 2023.

Trading in Osstem will remain suspended until further notice by the Korea Exchange.

Write to Da-eun Choi and Jae-young Han at max@hankyung.com

Yeonhee Kim edited this article.

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