By Joori Roh
SEOUL (Reuters) – South Korean police have arrested an employee of dental implant maker Osstem Implant 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 and junior KOSDAQ 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)
