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| Osstem Implant’s logo on display at the company’s headquarters in Seoul / Yonhap |
Korea Exchange currently deliberating company’s fate
By Anna J. Park
Although police on Wednesday arrested Lee, the employee of Osstem Implant suspected of embezzling some 188 billion won ($157.7 million) of company money on Wednesday, it’s still uncertain whether the country’s largest dental implant maker could avoid the unfortunate path of delisting from the tech-heavy Kosdaq market.
Since the news of the embezzlement became public with Osstem’s regulatory filing on Monday, the company’s stock has been suspended indefinitely from trading on the Kosdaq. Retail investors are more than anxious over the suspension, while the jittery situation is probably the same for the dental device company’s many overseas investors who hold about 45 percent of the firm’s shares.
According to the Korea Exchange (KRX) on Thursday, the question of its possible delisting cannot be clearly answered until late February due to the bourse operator’s procedural process.
“The KRX is currently examining and reviewing whether the issue should be submitted to related committees ― a company screening committee and Kosdaq’s market committee. The decision should be made within two weeks from now. If the issue is sent to the committees, it will take about a month to make a decision on the matter of delisting, after thorough deliberation,” an official from the KRX told The Korea Times, adding that the decision will be made by late February at the earliest.
KRX’s regulations state that embezzlement does not constitute an unconditional prerequisite for delisting. Rather, it’s a matter that needs to be deliberated thoroughly by the bourse operator. Even if the KRX decides to delist the company, it won’t hold an immediate effect; the suspension period could last up to two years, considering other processes remaining, such as reevaluation of the company.
The country’s top financial regulator, the Financial Services Commission, also said it would monitor the situation.
“The FSC will look into the situation closely, particularly in issues of manipulative stock trading, investor protection and minority shareholders’ rights,” FSC chief Koh Seung-beom said Thursday to reporters, adding that he’d take necessary measures if needed.
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| An employee surnamed Lee is taken into Gangseo Police Station in Seoul on Thursday after his arrest the day before. Lee is charged with misappropriating 188 billion won ($157.7 million) of company money. Yonhap |
Osstem Implant CEO Eom Tae-gwan stressed that the company expects that up to 150 billion won, out of the embezzled 188 billion won, could be retrieved through the police. The company chief also vowed to do his best to bring an end to the current suspension of the company’s stock trading.
In his official statement announced early this week, Eom highlighted that the company has been maintaining ample cash reserves worth over 200 billion won, as it saw all-time-high earnings and revenues last year. The CEO also refuted some media reports that he said incorrectly claimed that the embezzled money accounted for 92 percent of the firm’s owned capital.
“From the end of 2021, the embezzled money accounted for about 59 percent of the firm’s owned capital,” the CEO said. “The company is currently making every effort to retrieve the money, and the amount does not severely impair our financial status,” the CEO stressed, following his apology to investors.
Market watchers cautiously predict that the possibility of a delisting may not be high, given the situation. They also point out that the KRX’s tendency to delist companies is rare, considering the ramifications of the move.
Meanwhile, the financial authorities are considering launching a special audit of the dental company’s financial statements. Banks have also strengthened monitoring of the situation, and some are set to reevaluate the firm’s credit status, if necessary.
Osstem Implant has about 300 billion won worth of debt owed to banks, as the end of the third quarter last year. Its short-term debt within a year is about 108 billion won.
Will Osstem Implant be delisted from Kosdaq?
Source: Buhay Kapa PH
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