The CEO of Glosfer on the run?
Kim Tae-won, the CEO of Glosfer -- which created the Nowon Coin, a blockchained-based regional currency, in cooperation with the Nowon district government -- is at the center of a controversy as he is on the run with shares valued at 25.5 billion won. Glosfer on Sept. 30 became the largest-shareholder of Glosfer Labs, formerly GMR Materials, after purchasing the stake owned by Gold Mountain Group. Golsfer bought 23.99 percent of Glosfer Labs. On Dec. 12, Golsfer Labs announced that it was buying a 74.55 percent of Glosfer’s share valued around 25.5 billion won. This raised concerns of Kim pocketing the stake. Kim has since turned off his phone. Abnormal acquisition procedure Usually when a company takes over another company, the buyer’s capital size is considered. Glosfer’s main income source has been the investment that it brought in through the initial coin offering (ICO). The company was able to collect roughly 14.8 billion won from an ICO in 2017. In March through a second ICO its accumulated investment totaling $50 million, or 59.4 billion won. When Glosfer acquired Glosfer Labs on Sept.30, Glosfer bought the shares for 19.5 billion won. It’s not an unusual amount considering the investment it has been able to secure through its ICOs and earnings made from various government projects. However, Glosfer since the acquisition has started to take unusual steps. Glosfer Labs on Sept. 30 made three announcements. One was 5 billion won of paid-in capital for Glosfer, and the second was an issuance of convertible bonds for Cornerstone Alliance Fund (7 billion won) and CryptoIR (3 billion won). The final announcement was a 5 billion won convertible bond for Crypto IR. In the newly-revised version as of Dec. 12, the 5 billion won convertible bond recipient was changed from Crypto IR to two other groups – Alpha Materials (2 billion won) and Alpha Bio Labs (3 billion won). Both are owned by Alpha Holdings. Usually companies use convertible bonds for paid-up capital increases when they are trying to buy some time as they are having some financial problems. But in this case, the size of the convertible bond was 20 billion won immediately after the acquisition was made. In addition, Glosfer Labs sold 64,000 shares of its affiliates for 1.3 billion won in November to secure additional liquidity. The company is currently relying on outside investments amounting to 33 billion won, which is not the usual acquisition process. On the run with 74.53 percent stake? Rumors of the CEO in hiding after pocketing the profit started on Dec. 16, when Glosfer Labs announced that it was buying Glosfer’s 74.53 percent stake for roughly 26.5 billion won as a means of starting a new blockchain IT businesses and to participate in Glosfer’s management. But in an update on Dec. 12, 13 billion won of the 25.5 billion won has been already paid. As such, in the blockchain community there has been speculation that Glosfer is pocketing the profits from the shares that it sold to Glosfer Labs and then running away. There’s even speculation that Glosfer Labs secured 33 billion won of investment for this exact reason. JoinD has tried contacting Glosfer officials. However, it turns out many of the officials have already left the company. A former employee of Glosfer said since last year and throughout this year that many of the employees were let go. The former employee said to have more accurate information, it is important to contact the CEO. However, the CEO has turned off his smartphone. “Rumors are wrong” Some argue that the claim that the CEO has pocketed the profit and is on the run is nothing but a rumor. “My understanding is that a former co-worker is the one that’s spreading the rumors,” said a Glosfer Labs official. “It’s only a rumor.” Hycon community members also argue that Glosfer only used Glosfer Labs to make the back-door listing easier and that securing the investments through convertible bonds is legitimate. They ask that if the CEO is on the run with the investment, would he have received an award from the Minister of SMEs and Startups? Kim released a statement to investors saying that Glosfer is being accused through unconfirmed claims and that the Glosfer employees are working hard.