Osstem Implant: fund manager embezzled ₩188B, 91.8% of equity, stock frozen

On the first trading session of 2022, Kosdaq suspended dental-implant maker Osstem Implant's stock indefinitely: an employee in charge of fund management, identified only by his surname Lee, had allegedly embezzled ₩188 billion (about $157 million). Osstem said the stolen sum equaled 91.81% of its equity — the single largest embezzlement in the history of Korea's listed firms. The company sued Lee and disclosed the case in a regulatory filing on Jan 3, 2022.

Lee was not a stranger to headlines: in October 2021 he became popular among Korean retail investors for buying a 7.62% stake in Kosdaq-listed Dongjin Semichem for ₩143 billion. Dongjin's own filing showed he bought 3.91 million shares on Oct 1 and sold 3.36 million of them for ₩111.2 billion between Nov 18 and Dec 20 — at an average price 7% below his purchase.

The fallout reached far beyond one desk. Minority shareholders feared delisting as the Korea Exchange began reexamining Osstem's qualification to stay listed, and foreign investors — who collectively hold 45% of the company — were expected to take significant losses. Police in Seoul's Gangseo district began tracing Lee's whereabouts.

One employee in charge of fund management could move a sum equal to 91.81% of the company's equity before anyone noticed — the largest embezzlement ever recorded at a Korean listed firm.

Osstem's remedy came only after the fact: a lawsuit and a regulatory disclosure, which still froze the stock on the first session of 2022 and triggered a delisting-qualification review.

The same individual had spent the stolen money in plain sight, taking a ₩143 billion stake in Dongjin Semichem that made him a retail-investing celebrity two months before the theft surfaced.

Foreign investors held 45% of Osstem, so a domestic control failure spread losses into international portfolios.

If 91.8% of a company's equity can leave through one desk, controls failed long before the theft; dual approval on treasury movements is cheaper than any scandal.

Seoul Gangseo Police were tracing Lee, whose whereabouts were unknown. Osstem vowed to retrieve the money as quickly as possible. The Korea Exchange started reexamining Osstem's listing qualification and also began inspecting Dongjin Semichem, whose shares kept trading. Minority shareholders openly discussed the possibility of delisting.