[Asia Economy Reporter Jang Hyowon] Ostem Implant issued a statement regarding reports that company funds were used to pay insurance premiums for Chairman Choi Kyu-ok, stating that the insurance proceeds belong to the company and that this was not a scheme to improperly benefit the chairman.
On the 24th, Ostem Implant stated in the announcement, “In February 2021, to prepare for risks that could arise in the event of the sudden incapacity of the founder and largest shareholder, the chairman, we took out a whole life insurance policy with Ostem Implant as the policyholder and beneficiary, and the chairman as the insured.”
They continued, “In the event of an insured incident, that is, the chairman’s death, the company will receive the contract amount. The chairman is merely the insured, and the reason the insured is the chairman is because he guarantees loans amounting to approximately 520 billion KRW for the company, and this amount may increase in the future. This insurance is to partially prepare for the risk of losing the guarantor in case of incapacity.”
Furthermore, they explained, “The insurance proceeds of 60 billion KRW in the event of an insured incident are company funds, and the company decides how to use the received insurance money. The insurance subscription is not a matter for board resolution and is completely unrelated to amendments to the articles of incorporation. If the whole life insurance beneficiary is changed from the company to an individual, the individual must pay back all amounts paid by the company.”
Additionally, they stated, “If the amounts paid by the company are not reimbursed and the beneficiary is changed to an individual, it constitutes a gift and breach of fiduciary duty. Severance pay paid to company executives is already calculated according to the company’s severance pay regulations, so the insurance subscription is not a means to pay the chairman additional severance pay.”
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