Trading of Osstem Implant shares to resume

Osstem Implant's headquarters in Seoul / Yonhap

By Lee Min-hyung

The Korea Exchange will resume trading of Osstem Implant shares on Thursday in light of the firm's efforts to improve its internal governance system in response to its recent embezzlement scandal.

“We have decided to keep the company listed on the secondary Kosdaq, as the dental equipment manufacturer set up an audit committee and verified its internal accounting control system through a third-party institution,” the exchange operator said in a public statement.

All trading of Osstem's shares has been suspended since the beginning of 2022 after the company was mired in controversy surrounding an employee who allegedly embezzled 220 billion won ($174 million). The incident made headlines, as it was the single largest embezzlement scandal in history here.

The exchange's corporate screening committee has since inspected the company to determine whether to delist Osstem Implant from the local stock market. However, the committee decided to resume the trading of shares after confirming Osstem's plans to keep strengthening its management transparency.

“Osstem Implant will share the details of what measures it has taken to improve management transparency by the end of this year,” the exchange said.

This decision will enable Osstem Implant shares to be traded on the Kosdaq for the first time in almost four months. Osstem's latest closing price was 142,700 won per share, and its market capitalization reached 2.03 trillion won.

More than 40,000 retail investors of the company hold 62.2 percent of all issued shares as of the end of last year.

Even if they have evaded the worst-case scenario of the firm being delisted, the stock price of the company is widely expected to drop in the aftermath of the scandal. The sluggish performance of the local stock market will also negatively affect Osstem's stock price movements.

From the beginning of this month, the secondary stock market has been on a downward trajectory amid growing monetary uncertainties sparked by fears over big interest rate hikes by the U.S. Federal Reserve.

Nonetheless, Osstem Implant remains robust in its earnings performance. In a preliminary earnings report, the company achieved an operating profit of 51.2 billion won in the first quarter, up 100.5 percent from the previous year. Its sales also soared to 234.1 billion won, up 36.5 percent during the same period.

The first quarter of this year marks the first time that the company's quarterly operating profit topped the 50-billion-won mark. The earnings growth was driven by its robust overseas sales, according to the company.