Game company launches a probe of its founder

Korean online game maker Gravity Co. said yesterday in a regulatory filing that it is conducting an investigation into its founder and former chairman Kim Jung-ryool over his alleged misappropriation of royalty payments. Gravity’s chief executive Ryu Il-young added that the company is cooperating fully with the authorities. In August, Mr. Kim sold his 52.4 percent stake, or 3.64 million shares, for 400 billion won ($379 million) to Japan’s EZER Inc. and TechnoGroove Inc., two affiliates of Softbank Group, an Internet service provider. The company said it was informed by EZER of some royalties that were not accounted for in Gravity’s financial statements. The Korean company said Mr. Kim, 52, admitted embezzling about $6 million over the last two years, and has paid the company close to $7.3 million, including interest. A spokesman at Gravity said the company is not considering any criminal action at this juncture, but industry analysts pointed out that Mr. Kim could be charged with violation of foreign exchange control laws. by Chang Chung-hoon, Yoo Jee-ho