Against the backdrop of the dysfunctional general meeting of shareholders, an activist investor requested that a lawsuit be brought against GungHo's directors and others. This has brought alleged misconduct by a former executive and internal control issues under scrutiny, with courtroom battles expected to intensify.
Toyo Keizai reported that it had confirmed that the Hong Kong investment fund Lim Advisors had requested that a lawsuit be brought against the directors and others of GungHo Online Entertainment,Inc., a major online gaming company. It has been pointed out that courtroom battles involving activist investors are increasing against the backdrop of dysfunctional general meetings of shareholders.
The former head of the systems division was arrested in July this year on suspicion of breach of trust. From January through December 2022, the individual allegedly placed orders for fictitious services and caused a total of approximately ¥40 million to be transferred. The investigation found that approximately ¥246 million was improperly transferred using similar methods from 2017 through 2025, with the individual suspected of embezzling most of it. It also revealed that approximately ¥100 million in funds flowed out through payments to business partners for service outsourcing fees for services that did not exist. The former executive was dismissed for disciplinary reasons in July this year.