Nexon’s Crisis
Nexon has faced a crisis as its chairman Kim Jung-ju was indicted without detention on July 29 on charge of offering bribes to a senior prosecutor. Later that day, he made a subsequent written apology and resigned his position as a registered director at Nexon Japan.
Former regional chief prosecutor Jin Kyung-joon, who had taken bribes from Kim, was indicted as well on the same day, and then was dismissed by the Justice Ministry on August 8. The senior prosecutor bought Nexon’s unlisted shares with 425 million won he had taken from Kim in 2005, and received Nexon Japan’s 8,537 shares on condition of reselling the unlisted shares at 1 billion to Nexon in the next year. Later Jin made about 12 billion won in profits through a sale of the Nexon Japan shares.
Kim has been under suspicion of being involved in illegal insider trading when he sold NX Properties, a real estate management affiliate of NXC Corporation, the parent company of Nexon, to Wisekids Company owned 100 percent by him and his wife.
As the prosecution’s investigation focuses on the corruption of Kim and his company Nexon in the wake of the indictment of the two people, there is a growing possibility that the prosecution will extend its investigation into the whole Nexon Group including NXC, the holding company of Nexon Group, resulting in louder voices of concern about setbacks in business.
“Chairman Kim jung-ju’s personal corruption and alleged irregularities in management have turned Nexon’s image from an icon of venture legends to an immoral giant gaming company,” said an Industry official, adding “Much attention is paid to how the company is going to overcome the crisis.”