Dong Sung Bio Pharm announced on the 25th that a misappropriation amounting to 17.7 billion won has occurred. This represents 30.6% of its equity.
According to the company, the previous day, Dong Sung Bio Pharm's in-house auditor, Ko Chan-tae, filed a complaint with the Dobong Police Station in Seoul against three executives, including Chief Executive Officer Na Won-kyun and two registered executives, on charges of embezzlement and violations of the Capital Markets Act.
The company stated, "We plan to take action concerning matters related to this case in accordance with legal procedures and to cooperate with the investigation by relevant authorities."
Dong Sung Bio Pharm is embroiled in a management dispute between the second and third generations of the owner family. The conflict is between Chairman Lee Yang-gu, the son of the late founder Lee Seon-kyu, and his nephew, Chief Executive Officer Na Won-kyun. CEO Na is the son of Lee Kyung-hee, the chairman's sister and the head of Omasharip Cosmetics.
Meanwhile, the company entered a rehabilitation process on the 23rd. As a result, management rights and asset disposal rights were transferred to the administrator. The court appointed Chief Executive Officer Na Won-kyun and a third party, Kim In-su, as co-administrators.