FADU announced on the 2nd that it will shift from the previous dual-CEO system of Lee Ji-hyo and Nam I-hyeon to a sole-CEO system under Nam I-hyeon. The management structure was changed as Lee resigned.
FADU also conveyed the same in a shareholder letter that day. The company said, "Due to legal risk and a transaction suspension, our technology, business, and employees' efforts continued to be overshadowed by interpretations and controversy over past issues," and added, "We determined that such a situation is not desirable to fully demonstrate the company's future value at a time when a Critical opportunity has presented itself."
It continued, "We decided to reorganize the board so the board can focus entirely on future growth," and "We have also made new hires to strengthen compliance management. Through this, the company plans to devote all efforts to enhancing shareholder value."
FADU said that while Lee is resigning as CEO, Lee will remain with the company. The company said, "Lee will step down from the board but will remain with the company to take on the responsibilities and roles needed for stability and growth," and added, "Under Nam's leadership, we will achieve greater growth without wavering."
Prosecutors in Dec. last year indicted the FADU corporation and three members of FADU's management on charges of violating the Financial Investment Services and Capital Markets Act. Prosecutors believe there were problems in the process by which FADU listed on the KOSDAQ market in Aug. 2023 under the technology special listing program. At the time of listing, it presented an annual revenue forecast of 120.3 billion won, but the actual figure was 22.5 billion won. Prosecutors say management recognized a business contraction yet realized trading profits through pre-funding and proceeded with the listing, causing investor losses.
The KOSDAQ Market Division of the Korea Exchange (KRX) said on Dec. 19 last year, "We found that documents submitted by FADU in connection with the listing review contained false statements or omissions of important matters for investor protection," and is examining whether the company should be subject to a substantive review of listing eligibility. FADU's transaction is currently suspended.
A substantive review of listing eligibility is a system under which the Korea Exchange (KRX) reviews the suitability of maintaining a listing when serious issues arise regarding a company's financial or management transparency. The KOSDAQ Market Division of the Korea Exchange (KRX) said on Jan. 13, "In consideration of the need for additional investigation to determine whether a substantive review is warranted, we are extending the investigation period by 15 business days." Accordingly, on the 3rd, guidance is expected on whether the trading halt will continue or be lifted.
FADU also addressed the listing process in the shareholder letter. The company said, "Over the 10 years since our founding, both CEOs and all employees have worked day and night with a single-minded determination to leap forward as a fabless (semiconductor design) company representing Korea," and added, "We were able to firmly take root as a member of the global big tech ecosystem in the AI data center market, which is at the core of the global industry."
It continued, "As the importance of solid-state drives (SSD), which are responsible for 'memory' within AI data centers, grows by the day, we are solidifying our position as a global leader in the SSD controller field, a core semiconductor," and added, "The boom in the AI data center market, which has been in full swing since 2025, is leading to explosive growth beyond expectations in the enterprise SSD market, which is our focus."
The company also said, "This year is expected to see an unprecedented boom," and added, "We are belatedly making visible the success in the global market promised at the time of listing, and a turnaround to profit is also just ahead." It continued, "The 6th-generation (Gen6) controller to be unveiled within the year will be a product that proves the world's best technological prowess," and added, "We will surely repay you with the best results."
A FADU official said, "We sincerely apologize for causing concern to investors, shareholders, employees, and partners," and added, "Lee will step down from the post and devote themself with humility for FADU's uninterrupted growth and organizational stability." The official continued, "Employees will faithfully cooperate with the procedures of regulatory agencies and the court going forward," and added, "Any additional confirmed matters will be disclosed in a timely manner in accordance with relevant laws and exchange regulations."