Korean dairy firm Namyang in sticky spot after claim its yogurt kills coronavirus
- Shares in Namyang Dairy Products soared after press conference claiming it offered protection against Covid-19
- But authorities have shot down the claim and are now investigating allegations of stock manipulation
The country’s Ministry of Food and Drug Safety has asked prosecutors to press charges against Namyang Dairy Products, accusing it of breaching a ban on claiming certain kinds of food can prevent or treat diseases. The offence is punishable by up to 10 years in prison or a fine of 100 million won (US$90,000).
“We will continue to actively curb illegal advertisements that disturb trade order and mislead consumers,” the ministry said as it warned companies against “false and exaggerated advertisements”.
Financial authorities have also come under pressure to investigate allegations of stock manipulation, as the company’s share price began rising days before the results of the lab tests – financed by the company – were made public at a press conference on Tuesday.
Although the announcement contained a number of caveats concerning the validity of the early-stage test results, the news made headlines across the country, prompting investors to snap up the company’s shares.
The yogurt products also sold out at retail stores in a matter of hours.