Police Reinvestigate Namyang Dairy Products Over 'Bulgaris-Origin Stock Manipulation Suspicion' Complaint

Chairman Hong Won-sik Booked as a Suspect

The Seoul Metropolitan Police Agency's Financial Crime Investigation Unit conducted a search and seizure at the headquarters of Namyang Dairy Products in April last year, targeting Namyang Dairy Products, which was reported to the Ministry of Food and Drug Safety for claiming that its product, Bulgari, has a COVID-19 suppression effect. [Image source=Yonhap News]

[Asia Economy Reporter Choi Tae-won] It has been confirmed that the police have launched a reinvestigation into Namyang Dairy Products, which was reported by the Ministry of Food and Drug Safety for claiming that its probiotic beverage product 'Bulgari' has COVID-19 suppression effects.

The Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency announced on the 6th that the prosecution requested a reinvestigation regarding the case in which the Ministry of Food and Drug Safety filed a complaint against Namyang Dairy Products for violating the Food Labeling and Advertising Act. Previously, in April 2021, Namyang Dairy Products announced at a symposium that the Bulgari fermented milk product had antiviral effects against COVID-19. The stock price of Namyang Dairy Products surged by 8.57% the day after the announcement. The Ministry of Food and Drug Safety, through its investigation, concluded that Namyang Dairy Products exaggerated the experimental results and filed a complaint with the police based on Article 8 of the Food Labeling and Advertising Act. Article 8 prohibits "labels or advertisements that may be perceived as having efficacy in the prevention or treatment of diseases."

The police, who began the investigation, sent four executives including CEO Lee Kwang-beom of Namyang Dairy Products to the prosecution without detention in September 2021 on charges of violating the Food Labeling and Advertising Act. However, they dismissed the case for insufficient evidence regarding stock price manipulation, and the prosecution deemed the police investigation insufficient and requested a reinvestigation in July last year. It is reported that in this reinvestigation, the police are also reviewing the case filed by the civic group Halbindang in March last year, which additionally accused Chairman Hong Won-sik of Namyang Dairy Products of violating the Food Labeling and Advertising Act and stock price manipulation. However, it is known that Chairman Hong has not yet been questioned as a suspect.

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