Korea’s Namyang Dairy Products adds short-swing profit to its list of scandals – Pulse by Maeil Business News Korea – Pulse News

[Photo by Han Joo-hyung]

[Photo by Han Joo-hyung]

Scandal-ridden South Korean dairy brand Namyang Dairy Products Co. belatedly admitted to short-swing profit by an employee, costing more confidence in the stock embroiled in owner family risk.

According to multiple industry sources from the investment bank industry on Wednesday, the Financial Supervisory Service (FSS) discovered in January that a staff of Namyang Dairy Products profited from a swing trade in company shares and notified the food and dairy products manufacturer.

Upon the tip, Namyang Dairy Products collected all of the profits the insider made on the swift purchase and sale of the stock.

The FSS monitors any short-swing trading in corporate stocks by major shareholders or insiders to protect investors. Under the country’s capital market act, the regulator can claim return of any profits made by an employee or major shareholder on stock transactions that occurred within a six-month period regardless of whether insider information was used.

The FSS found that Namyang Dairy Products insider gained 6.2 million won ($5,068.5) in profit through transactions last year.

The latest incident raises more confidence issue over Namyang Dairy Products.

Its chairman Hong Won-sik offered to resign after in May after the company was under fire for claiming that its yogurt drink Bulgaris prevents Covid-19 infection. The company is in legal dispute with Hahn & Company which raised multiple suits after the owner unilaterally cancelled the deal to hand over a controlling 53 percent in Namyang Dairy Products and instead found a new buyer Dayou Winia Group.

The employee in question is suspected of making the swing profit upon coming across information related to the scandals in advance.

Namyang Dairy Products said that it returned the trading profit earned by the employee and took measures according to its personnel rule.

The company, however, did not disclose further information on the employee and disciplinary action, raising suspicion of downsizing the scandal amid growing investor concerns over internal control of listed companies following the massive corporate embezzlement scandal at dental implant maker Osstem Implant Co.

Namyang Dairy Products claimed it had posted the short-swing profit on its website on January 5, the next day it learned of the incident from the FSS. But it specified the issue in the audit report only in March.

Shares of Namyang Dairy Products added 0.4 percent to 413,000 Thursday morning.

By Cho Yoon-hee and Lee Eun-joo

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]

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