Posted October. 20, 2005 06:16,
Kim Jung-ryool , a successful venture company entrepreneur who sold his company Gravity to Softbank Japan for 400 billion won, was accused of appropriating company money during his tenure as chairman.
Gravity, an online gaming company founded by Kim in 2000, has recorded stunning growth with its flagship game Ragnarok Online, a popular product played by 30 million users daily in 37 countries worldwide.
Gravity announced on October 19 that it had launched an investigation after finding out that the former chairman had not been faithfully entering game royalty revenues worth $6 million or six billion won in the financial statements for several years.
The company added, Kim admitted to the omission of revenues on October 17 before he returned 7.8 billion won including the principal and six percent interest.
Kim explained, It is true that there was some omission of revenues. But all the money was spent for the benefit of the company. I even paid for the loss with my own pocket money to fulfill my moral obligation.
Gravity was listed on NASDAQ last February. Only three months later, however, it faced a class action lawsuit filed by its investors. Investors argued that they were not fully informed of the risks involving the Chinese market by the company and that there was a difference between what the companys IR documents said and its actual sales performance.
Its share price plunged from $13.50 to slightly higher than $5.
Kim sold his shares (52.4 percent) for 400 billion won to EZER and Techno Groove, subsidiaries of Softbank, in August. But this has raised many peoples eyebrows in the industry.
Kim, Nam-ju, the CEO of Webzen, an online game developer, said Selling online game technology is equivalent to selling semiconductor technology, the nations leading export industry.
Korea has remained on top in the global online game market, beating other top nations such as the U.S. and Japan, mainly because of its excellent high-speed internet environment and advanced multi-player online gaming technology.
Critics said that Korea has lost its competitive edge in the industry as Gravity, one of the nations leading gaming companies, sold its technology to a Japanese firm.