Samyang Food is being swayed by the so-called ‘Owner risk.’ Recently, the company’s chairman and his wife were investigated by the Prosecutors’ Office on charges of embezzlement, and after the news broke, the company’s stock prices started declining.
The 6th Division detective of the Seoul Northern District Prosecutors’ Office, Prosecutor Lee Dong-su, announced on the 21st that it has summoned and investigated Samyang Food’s owner couple Jeon In-jang and Kim Jung-soo on charges of embezzlement. The prosecution is also investigating Samyang Foods’ employees, affiliates and business partners.
Chairman Jeon and his partners are accused of taking large amounts of corporate funds by using their owner status. Some speculate that the crime caused an estimated damage of 80 billion won, but prosecutors said it is difficult to specify since they are still in the early stages of the investigation.
Previously, Samyang Food was suspected of receiving expensive supplies of ramen boxes and ramen seasoning from a company operated by the owner’s family. Ramen boxes and ramen seasoningwere bought fromSamyang Pruwell Co. Ltd. at inflated supply prices, thereby making Chairman Jeon “fatter” by the moment, the claims the charges. The prosecution is also looking into project transfers as well as unrequired succession status of the company.
When news of the summons investigations of chairman Jeon and his partners broke, Samyang Food’s stock prices were broken up; the closing price of the day was 7.89 million won, down 5.4 percent from the previous day. The Korea Exchange put in a request for Samyang Foods for the “disclosure of information on the prosecution’s investigation into the alleged embezzlement by the current management.” The deadline for the reply is 6:00 pm.
An official from Samyang Foods said, “Chairman Jeon and his partners have been faithful to the summon investigations by the prosecutors last week and have tried to resolve any misunderstandings,” further adding, “There is nothing more on which to speculate because the investigation is still ongoing.”
Samyang Food has gained popularity in the overseas markets for its products such as Buldak stir-fried noodles, and sales have grown rapidly over the past few years. Last year, its sales reached 458.83 billion won, up 27.6 percent from the previous year. Its operating profit rose 71.4 percent to a total of 43.03 billion won.