Allegations of disciplining employees by manipulating internal reports
Accused of forging office documents and obstructing business
Workforce reduction ahead of IPO... "Encouraging voluntary resignation"
The police have confirmed that Kim Seul-ah, CEO of Kurly, has been booked as a suspect on charges of manipulating internal whistleblowing reports to discipline employees. Although this booking follows standard investigative procedures, the fact that a sitting company CEO is in suspect status has drawn attention from the industry.
On the 1st, the Gangnam Police Station in Seoul announced that Kim, who was reported on charges including forgery of private documents, use of forged private documents, and obstruction of business, is legally classified as a suspect. Typically, criminal cases shift to suspect status when there is sufficient evidence of wrongdoing, but in cases of complaints or accusations, booking as a suspect occurs immediately upon case registration. The police explained that Kim’s booking followed this investigative procedure.
With Kim now booked as a suspect, it cannot be ruled out that she may be questioned by the police while still serving as the CEO of her company. The police plan to review the complaint and the complainant’s statements to decide whether to investigate Kim. Additionally, the police will conduct a legal review of the charges against Kim to finalize the direction of the case handling.
Earlier, in June, the police received a complaint alleging that Kurly manipulated reports submitted through its internal grievance consultation channel (VOE) to unfairly discipline employees. The complaint reportedly stated, "In January this year, an anonymous VOE report was submitted saying, ‘It is impossible to find the Quality Control (QC) team leader inside the company for a meeting.’ Kurly, which is undergoing workforce reductions aimed at relaunching its IPO and improving performance, allegedly manipulated this report to induce the team leader’s voluntary resignation."
Based on this report, Kurly investigated Mr. A, the QC team leader, and imposed a two-month suspension citing "confirmed poor attendance." After the suspension ended, Mr. A was demoted from team leader to staff. Mr. A filed appeals with the Gyeonggi Regional Labor Relations Commission and the Central Labor Relations Commission, claiming the disciplinary action was unfair, but these appeals were reportedly rejected.
Kurly stated, "This case was also dismissed by the Central Labor Relations Commission," and explained, "We received the complaint through a normal reporting channel and followed appropriate disciplinary procedures thereafter." They added, "Since the police investigation is ongoing, we will carefully await the results."
Meanwhile, Kurly attempted an IPO in 2021 but withdrew after controversy arose over the overvaluation of the loss-making company at that time. Kurly is currently striving to improve profitability to relaunch the listing, but operating losses have widened from 1.8 billion KRW in the first quarter to 8.2 billion KRW in the second quarter of this year.
The company’s valuation is also shrinking. On the unlisted stock trading platform Securities Plus Unlisted, Kurly’s closing price yesterday was 9,500 KRW, estimating its market capitalization at 401.2 billion KRW. This is about one-tenth of the 4 trillion KRW valuation recognized at the end of 2021 during the pre-IPO round.
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