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Photo: Prosecutors’ Office |
[Alpha Biz= Paul Lee] Seoul, South Korea — July 8, 2025 — South Korean prosecutors have indicted two vice chairmen of pharmaceutical company Medicoax for acquiring KOSDAQ-listed firms without capital and embezzling approximately KRW 52 billion (USD 38 million) in corporate funds.
The Seoul Central District Prosecutors’ Office’s Anti-Corruption Investigation Division 3 (headed by Chief Prosecutor Seung-hak Lee) announced on July 8 that the two executives, identified as Mr. A and Mr. B, were indicted and taken into custody on charges of aggravated breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, as well as violations of the Capital Markets Act.
According to the prosecution, the two acquired Medicoax and J&K Industry through capital-free transactions and subsequently diverted corporate assets, falsified public disclosures, and caused financial harm to the companies. Co-chairmen Mr. C and Mr. D of Medicoax are currently fugitives, and arrest warrants have been issued along with an Interpol Red Notice for both.
Medicoax has since been suspended from trading following a capital reduction, while J&K Industry was delisted in 2021.
Prosecutors believe that the individuals targeted the two listed companies specifically for the purpose of misappropriating their assets. One of the indicted executives is alleged to have used KRW 5 billion in company funds to acquire convertible bonds issued by a real estate developer in November 2011—resulting in financial losses to Medicoax. Of the KRW 5 billion transferred to the developer, KRW 2 billion was reportedly funneled back to the individuals and split between them.
The case highlights growing concerns over capital-free acquisitions and financial misconduct among small and mid-cap listed firms in South Korea.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
