"Bulgaris, COVID-19 Suppression Effect"... Former Namyang Dairy CEO and Research Director Referred to Prosecution

Hong Won-sik, chairman of Namyang Dairy Products, is announcing his resignation as chairman after issuing a public apology regarding the recent controversy over the announcement that the company's dairy product, Bulgari, has an effect in suppressing COVID-19. This took place on May 4th at the main auditorium of Namyang Dairy Products headquarters on Dosan-daero, Gangnam-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Jeong Dong-hoon] Four individuals, including former Namyang Dairy Products CEO, who announced that their fermented milk product, Bulgari, has COVID-19 suppression effects, have been sent to prosecution without detention.

The Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency announced on the 2nd that they investigated the food labeling and advertising law violation case against Namyang Dairy Products and sent four related personnel, including former CEO Lee Kwang-beom and former Executive Director Park Jong-su (former head of the Antiviral Immunity Research Institute), to the prosecution without detention. The police viewed that although only one type of Bulgari was tested, the company exaggerated advertisements as if all Bulgari products were effective in preventing diseases such as colds and COVID-19.

Earlier, on April 13, Namyang Dairy Products announced at a symposium that their fermented milk product Bulgari has antiviral effects against COVID-19, leading to a complaint filed by the Ministry of Food and Drug Safety for violating the food labeling and advertising law. Despite not undergoing animal or clinical trials, the announcement of COVID-19 suppression effects caused Namyang Dairy Products' stock price to surge by 8.57% the following day, April 14, creating confusion. On April 30, the police conducted a search and seizure at Namyang Dairy Products headquarters and investigated 16 company officials.

Following this incident, Namyang Dairy Products faced a boycott and a sharp drop in stock price. On May 4, Chairman Hong Won-sik issued a public apology, announced his resignation as chairman, and plans to sell his shares. Chairman Hong signed a contract in May to transfer 53% of his shares in Namyang Dairy Products to the private equity firm Hahn & Company for 310.7 billion KRW but announced the cancellation of the stock sale contract the day before.

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