Icure Pharmaceutical chairman indicted for $12 mil. embezzlement; stock trading halted

Icure Pharmaceutical said its founder and largest shareholder, Chairman Choi Young-kweon, has been indicted on charges of embezzlement and breach of trust totaling approximately 17.06 billion won ($12.2 million), prompting a suspension of trading in the company’s shares and triggering a substantive review of its listing eligibility.

The company’s shares were suspended from 11:57 a.m. on Tuesday at a price of 2,170 won. As of the end of the first quarter, Choi held a 13.6 percent stake in Icure Pharmaceutical, equivalent to 5,106,880 shares.

According to Icure Pharmaceutical, Choi, who served as CEO in 2020, is accused of acquiring call options on the company’s second and third convertible bonds (CBs) at prices significantly below their fair value based on the prevailing share price and conversion rates, causing an estimated 16.5 billion won in losses to the firm.

He also allegedly received 565 million won in unauthorized interim severance payments.

As a result, prosecutors have charged him under the Act on the Aggravated Punishment of Specific Economic Crimes (SOPA) for breach of trust and embezzlement, as well as under the Financial Investment Services and Capital Markets Act.

In response, Icure Pharmaceutical issued a statement expressing “deep regret” and pledged to overhaul its governance.

“The company will take this incident as an opportunity to reinforce management transparency and strengthen corporate governance,” it said.

Choi has voluntarily resigned from his post and will step down from all positions at Icure Pharmaceutical’s subsidiaries.

“We will completely separate the largest shareholder’s ownership from management to establish an independent governance system,” said Icure Pharmaceutical CEO Lee Yeong-seok.

Lee emphasized that the board and auditor are treating the situation with “the utmost seriousness” and will fulfill their fiduciary duties.

“We will pursue legal action, including damages claims against Choi, to recover the losses incurred by the company,” he said.

Lee added that Icure Pharmaceutical will bolster board oversight by expanding the number of outside directors and establishing a new compliance and ethics committee.

“We are committed to strengthening independent management and transparent governance to restore market confidence,” he said.

The company also pledged to fully cooperate with the Korea Exchange’s substantive review of listing eligibility to expedite the resumption of trading.

The embezzlement allegations and stock trading suspension comes at a time when the company’s financial performance is improving significantly.

Icure Pharmaceutical’s earnings have shown marked improvement in recent years.

According to the company, its operating margin, which stood at negative 73 percent in 2021 with an operating loss of 26.7 billion won, improved to negative 10 percent in the first quarter of 2025 with an operating loss narrowed to 1.8 billion won.

EBITDA (earnings before interest, taxes, depreciation, and amortization) losses also shrank from negative 62 percent in 2021 to negative 2.9 percent in the latest quarter, bringing the company close to breakeven.

“Our cosmetics manufacturing business achieved a quarterly operating profit for the first time in the first quarter of this year, while the pharmaceuticals division secured cumulative overseas supply contracts worth around 300 billion won across more than 40 countries over the past two years,” the company said. “We have also been reducing our debt ratio through divestment of non-core subsidiaries, liquidation of loss-making units, and asset sales.”