Why Osstem Implant Holds More Cash Than Its Net Assets

60 Billion More... Allegations Raised Over Executive Private Use

[Asia Economy Reporter Jang Hyowon] It has been revealed that Ostem Implant, which experienced the largest embezzlement case in the history of listed companies, held an exceptionally high proportion of internal cash compared to other companies. The market is raising questions about why Ostem Implant was holding such a large amount of cash simply in deposits and savings.

[Image source=Yonhap News]

According to the Financial Supervisory Service's electronic disclosure on the 7th, as of the end of the third quarter last year, Ostem Implant's cash holdings amounted to 320.6 billion KRW. Including short-term financial products, cash equivalents rise to about 368.6 billion KRW. This corresponds to 30% of total assets of 1.237 trillion KRW. The cash holdings exceed the net assets (equity) of 259 billion KRW by more than 60 billion KRW.

Ostem Implant's cash holding ratio is significantly higher than that of other companies. For example, its competitor Dentium had cash equivalents including short-term financial products at about 12% as of the end of the third quarter last year. Dio also holds cash around 10%.

The average cash holding ratio of domestic pharmaceutical and bio companies is also known to be around 10% of total assets. Generally, companies generate profits through investments or allocate funds to research and development (R&D) to foster future growth rather than hoarding cash. Simply holding cash results in opportunity costs and losses.

Accordingly, the financial investment industry is increasingly curious about why Ostem Implant keeps such a large amount of cash simply in bank deposits and savings. Some suspect that internal employees or executives might be holding large amounts of cash for private use.

A financial investment industry official said, "It is necessary to closely examine the deposit and withdrawal records to understand how Ostem Implant's cash has been managed," adding, "It should also be investigated how a single employee could have controlled such a large amount of cash."

In fact, Mr. Lee, the head of Ostem Implant’s financial management team, who was arrested yesterday on suspicion of embezzling 188 billion KRW, told his lawyer that the crime was not committed alone but under instructions from higher-ups. He claimed that half of the 851 one-kilogram gold bars purchased with the embezzled funds were handed over to Ostem Implant Chairman Choi Kyuok.

In response, Ostem Implant stated, "Our chairman has had no involvement or given any instructions related to this incident," and added, "The facts will be clearly revealed through the police investigation."

This content was produced with the assistance of AI translation services.