[Alpha Biz= Kim Jisun] FADU, Inc. said on Wednesday that allegations related to its initial public offering (IPO) focus on how revenue estimates at the time of listing should be legally assessed, emphasizing that the case does not challenge the company’s technology or the substance of its business.
In an official statement released on December 18, FADU stated, “During the IPO process, we presented our business outlook based on information available at the time and on reasonable assumptions,” adding that it will “faithfully clarify its position through the upcoming judicial proceedings.”
The company noted that the key issue is the legal interpretation of sales projection standards used at the time of listing, rather than any dispute over its technological competitiveness or business viability.
Earlier in the day, the Seoul Southern District Prosecutors’ Office’s Joint Investigation Unit for Financial and Securities Crimes indicted three FADU executives without detention, as well as FADU as a corporate entity, on charges of violating the Capital Markets Act.
According to prosecutors, FADU executives allegedly proceeded with a pre-IPO fundraising round in January 2023 while concealing a notification from SK hynix regarding reduced orders, thereby obtaining more than 10 billion won in alleged unfair gains. Prosecutors also suspect that during FADU’s KOSDAQ listing in August 2023, the company concealed the suspension of orders from major clients, inflated its offering price, and engaged in improper solicitation during its selection as an SK hynix partner.
FADU acknowledged that the case will proceed to trial but reiterated that the dispute is limited to the appropriateness of revenue projections disclosed at the time of its KOSDAQ listing. The company stressed that its core technology and business fundamentals remain intact.
“FADU will continue to focus on strengthening its technological competitiveness and execution capabilities, while recognizing its heightened responsibility to communicate transparently with the market and investors,” the company said.
Meanwhile, trading of FADU shares was temporarily suspended on Wednesday following market rumors and media reports. The suspension will remain in effect from December 19 until 30 minutes after the disclosure of the exchange’s inquiry results.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
