Nexon losing luster over unethical management
By Lee Min-hyung
Nexon is facing its worst-ever crisis, with the prosecution speeding up its investigation into the top management of the nation’s largest game company over allegedly unfair stock trading.
The widening investigation into Nexon founder Kim Jung-ju and senior prosecutor Jin Kyung-jun is tarnishing the company’s brand and provoking a series of controversies over the firm’s failure to fulfill its social responsibility.
This is further aggravating the already unfavorable public sentiment about the firm at a time when its new flagship title, “Sudden Attack 2,” is mired in its own controversy over its sexual content.
Expectations are that the uncertain future will put a brake on its aggressive expansion into the mobile gaming sector, amid the slowdown of the PC gaming industry.
The moral issue erupted this April when a state-run ethics committee launched an investigation into allegations that Kim peddled his influence in trading Nexon shares in 2006. The Nexon founder allegedly helped Jin reap more than 12 billion won ($10.4 million) in gains through stock sales.
Jin previously acquired some 10,000 Nexon shares for 425 million won in June 2005, selling them for 12.6 billion won last year.
As the dispute intensified, the prosecution formed a special investigation team on July 6, which on Tuesday raided the homes of Kim and Jin as well as Nexon headquarters in Pangyo, Gyeonggi Province, and its holding firm NXC.
“We are going to fully comply with any requests from the team,” said a Nexon spokeswoman. “Our official position has not changed since we issued our statement in June.”
The previous statement said: “We apologize for causing trouble. Nexon will reflect on the incident, and continue to fulfill our social responsibility.”
The special prosecution team, led by prosecutor Lee Keum-ro, said it will take a hard-line on the issue.
He previously said the top priority was to seek out facts, and pledged to punish those who violated the law.
The team summoned Jin Wednesday for questioning on whether he was engaged in any illicit activities while trading the Nexon stocks with Jin, and other snowballing suspicions over influence-peddling.
Following the investigation, local reports said Thursday that Kim acknowledged that he freely offered 425 million won to Jin for the purchase the Nexon share.
The prosecution, however, has yet to unveil the official results of its investigation.
Nexon was founded in 1994, growing into one of the nation’s largest gaming companies with various hit titles, including “Crazyracing Kartrider,” “MapleStory” and “Sudden Attack.”
Nexon has since established overseas branches in Japan, Germany, the United States and Taiwan.
Nexon Japan holds a 100 percent stake in Nexon Korea, with NXC owning a 61 percent stake in Nexon Japan. Last year, the company posted 1.7 trillion won in sales.