Dong Sung Pharmaceutical Announces Position on Malicious Complaint: "Will Firmly Respond to Acts Hindering Rehabilitation"

On June 27, Dong Sung Pharmaceutical issued an official statement regarding the criminal complaint filed by its full-time auditor, Ko Chantae.

The company stated, "This complaint is merely an allegation that ignores the factual and accounting realities, as it accuses the company of embezzlement and breach of trust by summing up the balance of a simple advance payment account at a specific point in time." Dong Sung Pharmaceutical added, "We plan to respond diligently in accordance with legal procedures."

According to the company, the claim by Ko and Brand Refactoring of "embezzlement of 17.7 billion KRW" differs from the actual accounting records. Dong Sung Pharmaceutical explained that this figure is simply the sum of transactions accumulated over a long period, even before CEO Na Wonkyun's appointment. The company stated that all related funds have been managed through external audits and accounting procedures, and there is no evidence to support the allegation of illegal conduct.

A Dong Sung Pharmaceutical representative said, "Ko was appointed during the tenure of former CEO Lee Yangku, and despite holding the title of 'full-time auditor,' it has been confirmed that he reported to work only once in the past several years and has never performed any audit duties or reviewed any documents. It is difficult to accept that someone who has not even fulfilled the basic responsibilities of an auditor is now claiming embezzlement of company funds."

The company further stated, "Ko's complaint is being used as a means of attack by former CEO Lee Yangku, who controlled the company for a long time, and his close associates, including a third party (Brand Refactoring), in an attempt to destabilize the current management. This issue was already submitted to the court during the hearing for commencement of rehabilitation proceedings in May, and the company provided a detailed written opinion, including related accounting data and background explanations."

The company added, "The court comprehensively reviewed the matter along with both parties' opinions and appointed Na Wonkyun and Kim Insu as joint administrators."

Meanwhile, Dong Sung Pharmaceutical has identified that during Lee Yangku's tenure as CEO, there were advance payments made to partner companies for which the sources of funds could not be clearly confirmed. The company has requested an investigation by law enforcement authorities and is actively cooperating to uncover the truth. Dong Sung Pharmaceutical believes that the matter will be thoroughly clarified through an objective judgment by the investigative authorities.

The company stated, "The reason we have refrained from responding to the media so far is because management believed that the utmost priority should be given to corporate rehabilitation, the survival of employees, and the protection of creditors and shareholders. However, as malicious slander continues, we will respond firmly, including taking legal action, against any similar distortions in the future."

The company added, "Since the commencement of rehabilitation proceedings, Dong Sung Pharmaceutical's business operations and collections have been recovering rapidly. In addition to the recovery of sales of major products, asset sales and restructuring to secure liquidity are progressing smoothly. The current management will do its utmost to ensure the success of the rehabilitation, undeterred by any external pressure."

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