Osstem Employee Purchased Other Shares Before Investing in Dongjin Semichem: Scale of Embezzlement Snowballed after Losses of Tens of Billions of Won

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Yi (45), an employee at Osstem Implant, who allegedly embezzled 198 billion won of corporate funds, enters the Gangseo Police Station in Seoul on the morning of January 6. Yonhap News

Yi (45), the head of the financial unit at Osstem Implant, who allegedly misappropriated 198 billion won of corporate funds, invested all the money he embezzled in stocks, losing tens of billions of won. Aside from the 30 billion won worth of losses Yi is known to have experienced after trading Dongjin Semichem shares, it appears he also lost billions to tens of billions of won after investing in other individual stocks. The police traced the money and revealed that Yi had lost money in the stock exchange by leveraging when trading with his own money before putting his hands on company funds. The police believe Yi’s losses in the market, which snowballed, could have been the motive behind the biggest embezzlement in the history of a listed company and are focusing their investigation in this area.

According to the coverage by the Kyunghyang Shinmun on January 9, the police traced the flow of Yi’s money and confirmed that he began investing in the stock market with corporate funds last March. The police believe Yi lost tens of billions of won from the investments he made with the company money and are trying to calculate the exact amount of the loss.

Last October, Yi purchased 3,917,431 shares of Dongjin Semichem worth 143 billion won and later sold 3.36 million shares for around 111.2 billion won. The exact amount he lost from his investment in Dongjin Semichem is expected to be determined by the sales price of the remaining 550,000 shares. In addition, the police discovered evidence suggesting that Yi also invested tens of billions of won he embezzled to purchase shares of another company. The investigation revealed that Yi also lost a lot of money from this investment.

The police also found that Yi had lost a large amount of money by investing in stocks even before he began misappropriating the company funds. He traded with leverage, meaning he borrowed money to invest in stocks. He invested hundreds of millions of won, but most of his investments resulted in losses. The stocks he traded with his and the company’s money were all traded through one Kiwoom Securities account.

Yi embezzled a total of 198 billion won, and later returned 10 billion won. So far, Osstem Implant is known to have lost 188 billion won because of Yi. Yi purchased 851 gold bars weighing 1kg each and when the police arrested Yi on January 5, they found 497 gold bars and more than 400 million won in cash in Yi’s hideout. They also freezed the 25 billion won in the Kiwoom Securities account. Yi had begun misappropriating corporate funds last March by transferring 5 billion won to his own account. He then embezzled a total of 45 billion won on five occasions. Then last October, he took 143 billion won at once. On January 8, the Seoul Southern District Court judged that Yi could attempt to flee and destroy evidence and issued an arrest warrant on charges of occupational embezzlement based on the Act on the Aggravated Punishment of Specific Economic Crimes.