 |
Osstem implant (photo = Yonhap news) |
[Alpha Biz= Reporter Kim Minyoung] Um Tae-kwan, CEO of Osstem Implant, is under investigation by prosecutors on charges of seeking private interests using undisclosed internal information. After the embezzlement of fund management staff at the end of 2021, Osstem Implant stressed that it would strengthen internal control for ethical management and expand managerial transparency.
According to securities firms on the 3rd, the Securities and Futures Commission under the Financial Services Commission recently filed a complaint with the prosecution against Eom Tae-kwan, head of Osstem Implant, on charges of violating the Capital Correction Act, including the use of undisclosed important information. As a representative who leads the company's management, he is suspected of using the favorable information of "a surge in operating profit and a surplus in net profit," which he learned during years of receiving internal reports from the accounting department, to pursue private interests through stock trading before the information was made public. Borrowed-name accounts under the names of spouses and acquaintances were used for stock trading. The Securities and Futures Commission believes that the move is aimed at avoiding insider trading regulations. In particular, Um did not fulfill his obligation to report changes in shares and equity ownership and return profits from short-term trading.
The Securities and Futures Commission filed a complaint with the prosecution against CEO Um and required the company to return short-term trading gains from the transaction. Osstem Implant was voluntarily delisted last year and is not currently a listed company. However, it was reported that the timing of CEO Um's charges was when he was a listed company. Um has been leading the company since he was appointed CEO in 2017.
Financial authorities strictly prohibit the use of undisclosed information learned in connection with their duties in securities transactions under the Capital Markets Act. Where executives of listed companies and major shareholders sell company shares on their own accounts regardless of their names, they are obliged to report them to the financial authorities within five days of the change date, and the profits from the sale (short-term trading gains) within six months of the purchase (sale) of shares shall be returned to the company. The profits from short-term trading, which Um took advantage of undisclosed information, were fully recovered in December last year.
They say that the timing of CEO Um's charges and the timing of the 200 billion won worth of embezzlement of employees, which caused a stir, are in line. In other words, the internal management and supervision system for ethical management itself did not work properly throughout the company. The embezzlement officer is the head of the financial management team who transferred a total of 221.5 billion won from a company account to a securities account under his name 15 times from November 2020 to October 2021 before investing in stocks and purchasing real estate. The employee was sentenced to 35 years in prison and a fine of 30 million won in the first trial of the court, and the sentence was maintained in the second trial held in January.
If Um's allegations turn out to be true in the prosecution's investigation, the moral hazard issue of major management (those responsible for internal control) could arise.
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
