With new evidence, Endotech plummets furtherThe controversial biotech firm Natural Endotech, locked in a vicious dispute with the consumer protection agency, once again pulled the tech-heavy junior market down on Wednesday after free falling to the daily limit.
Natural Endotech shares plunged 14.95 percent from the previous trade to close at 40,100 won on Wednesday. The shares are currently 53.7 percent less than they were April 21, the day before the Korea Consumer Agency announced that the company had been playing fast and loose with its ingredients.
The agency said that after inspecting 32 products made by the company, which specializes in natural pharmaceutical products using rare herbs, 21 of the products didn’t include the Cynanchum wilfordii they claimed to provide.
Instead, they used the herb Cynanchum auriculatum Royal, which is banned by the government from being used in products for human consumption.
Since the announcement, Natural Endotech stocks plummeted to the daily limit for four consecutive trading days before making a mild recovery on Tuesday.
But on Wednesday the stock took another tumble, after the consumer protection agency claimed to have an audio recording of CEO Jae S. Kim, in which he admits to knowing that the company was putting the lethal herb into its medicines.
Korea Consumer Agency President Jung Dae-pyo, who is the first ex-prosecutor to head the institution, told the JoongAng Ilbo that the recording comes from a conversation that took place on April 8 at the agency’s headquarters in North Chungcheong.
At the meeting with government officials from the consumer protection agency, the anti-trust watchdog Fair Trade Commission and the Ministry of Food and Drug Safety, the company’s CEO and research staff acknowledged that in testing some of the raw material for its medicine using the Agricultural Ministry’s testing method, Cynanchum auriculatum Royal was detected. In the recording, the company’s CEO admits to having made a mistake.
“CEO Kim acknowledged that an alien substance was detected,” the agency president Jung said in an earlier interview with the JoongAng Ilbo. “This is the truth that heaven and earth knows.”
Kim of Natural Endotech has argued that all of its products only use Cynanchum wilfordii to treat various geriatric diseases. The company is trying to clear its name by inviting consumers to visit its Cynanchum wilfordii farm down in Jecheon and Geumsan in Chungcheong. It hopes to restore consumers’ faith by showing them how the herb is cultivated and collected, as well as how the facility is managed.
BY LEE HO-JEONG, LEE SO-AH [firstname.lastname@example.org]
with the Korea JoongAng Daily
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