South Korea’s dairy boss drops claim that yogurt drink is effective against COVID-19

The president of a large South Korean dairy company resigned on Tuesday after police opened an investigation into the company’s claim that his yogurt drink was effective in fighting the novel coronavirus.

The resignation of Chairman Hong Won-sik of Namyang Dairy Product Co Ltd (003920.KS) came three weeks after the initial complaint and its retraction. The CEO’s sacking has done little to calm negative consumer reactions.

“I will resign from the post of chairman of Namyang Dairy to take responsibility for all of this and I will not hand over the management to my children,” Hong said in a public televised apology.

Hong and his family members own a combined 53.1% stake in South Korea’s No.3 dairy company by revenue, according to regulatory documents from Namyang.

Namyang Dairy officials could not be reached immediately for comment.

Seoul police raided the company’s headquarters last week.

The company claimed in a forum attended by reporters last month that its Bulgarian yogurt drink was effective in preventing COVID-19, pushing its stock up by nearly 30%.

South Korea’s Ministry of Food Safety and Medicines later issued a statement claiming that Namyang had no evidence to support his claim and accused the company of illegally disseminating misleading information.

Namyang Dairy shares were up 16.3% compared to the larger KOSPI’s 0.5% drop (.KS11) at 0243 GMT.

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