[Newsmaker] Dong-A Pharm owner in disgrace over probes

Kang Shin-ho, chairman of the nation’s top pharmaceutical company Dong-A Pharmaceutical, is being hit with a barrage of criticism over scandals that have hit him and his company.

The most recent charge against the company is that it sought to create slush funds worth tens of billions won by purchasing gift cards ― a type of prepaid card ― and reselling them for cash.

The prosecution is investigating allegations that Dong-A created the funds to offer kickbacks to local hospitals.

The pharmaceutical firm was recently searched on charges of bribing hospitals and doctors to prescribe medicine from Dong-A.

With Kang having previously promised to contribute to the advancement of the local pharmaceutical industry, the company is now at risk of losing its “innovative pharmaceutical firm” status. The government in June this year had selected some 40 plus pharmaceutical companies, including Dong-A, to spearhead growth and transparency in the sector.

Kang had earlier participated in a campaign hosted by the Korea Pharmaceutical Manufacturers’ Association, pledging that he was open to strong penalties imposed by the government should his company be found to be guilty of any irregularities, such as offering bribes and kickbacks.

The prosecution already searched Dong-A offices in Seoul last month, but results on the investigations are pending.

Dong-A’s origin was a pharmaceutical store that started in 1932. The store branched out and underwent the name-change to Dong-A in 1949. As of this year, Dong-A is the nation’s No.1 firm in the pharmaceutical industry in terms of assets.

By Kim Ji-hyun (jemmie@heraldcorp.com)