Adviotech, a KOSDAQ-listed bio venture company known for developing new drugs and vaccines based on egg antibody (IgY) technology, has experienced a dramatic downturn in its fortunes over the past year. Four years ago, the company was relatively stable, having established itself in the KOSDAQ market with a solid financial standing. However, recent turmoil, including repeated changes in management and ownership, has led to a significant liquidity crisis, with 10 billion won disappearing from the company's accounts.
Allegations have emerged that the new management, stepping in after the collapse of the Iwha Group (now I Group) due to embezzlement and breach of trust charges, borrowed against the company's credit and funneled the funds into their own struggling private companies. How did Adviotech, once a leader in vaccine development, find itself in such dire straits?
The saga of Adviotech's management began in June of last year when founder and CEO Jeong Hong-geol signed a contract to transfer management rights after a series of consecutive trading days at the upper limit. This was in the wake of a capital increase of 27.8 billion won for the successor of the suspended Canary Bio, now known as OcuP BioM. However, suspicions arose regarding the management's ties to the previous delisting of Hyundai Feed (formerly Canary Bio), leading to the cancellation of the payment.
In July, the second acquirer, Lee Un-jang, CEO of Orion ENC and an expert in small modular reactors (SMRs), took over. Under his leadership, Adviotech began to shift its business focus significantly. During a special shareholders' meeting on September 30, the company changed its name to Orion Atomics and added over 30 new technology themes unrelated to its core bio business, including small modular reactor development and nuclear decommissioning robots. A former head of the KOSDAQ market's disclosure team was also appointed as an auditor.
However, this ambitious pivot to nuclear technology was short-lived. Lee Un-jang was dismissed by the board just 23 days after taking office on October 23. In response, Lee's side filed a lawsuit against CEO Kim Dong-hyun for an injunction to halt his duties, but they abruptly withdrew the suit on October 24, reaching a settlement. Just days later, on October 27, Lee's team also retracted a planned capital increase of 16.5 billion won.
Orion ENC, which struggled to secure acquisition funds, was reported to have borrowed 1.5 billion won from Adviotech, raising suspicions that behind-the-scenes forces had installed a nuclear expert to change the company’s name and boost its stock price before discarding him. Ultimately, the SMR project was left unexecuted, serving only as a speculative boost.
Following Lee's dismissal, on November 10, the acquirer was suddenly changed to BK Partners Investment Association No. 1. On November 19, this association became the third-largest shareholder of Adviotech after paying 5.6 billion won for a capital increase.
Notably, the largest investor in this association holds a 99.19% stake and is none other than Itron, a company that was delisted from the KOSDAQ in 2023 alongside Iwha Electric and EID due to embezzlement and breach of trust allegations totaling over 100 billion won.
According to investment banking sources, the real force behind this transaction was Kim Young-jun, chairman of the Iwha Group, who was under trial while indiscriminately acquiring KOSDAQ-listed companies. Having already acquired MicobioMed (now The Biomed), Kim targeted Adviotech, which had a market capitalization of only 40 billion won. During this period, outside directors who had joined when Lee Un-jang was appointed, including Hwang Hae-ryong and Choi Hyung-nam, hastily submitted their resignations on November 20 and December 12, respectively, amid the turmoil of ownership changes and management disputes.
The company, now controlled by a shell association linked to the delisting forces, reverted its name back to Adviotech during a shareholders' meeting on March 31 of this year.
In June, the largest shareholder changed again. On June 4, the largest investor in BK Partners Investment Association No. 1 shifted from Itron to L&J Trust Holdings, leading to the appointment of Kim Do-hyung as the new CEO. Kim is also the head of Onhill, a private company distributing animal pharmaceuticals, and previously led Notus (now HLB Biosystems).
Shortly after Kim's appointment on June 19, the board replaced existing outside directors for personal reasons and appointed several associate professors in veterinary and pharmaceutical fields as new outside directors. They also added over 20 animal-related business purposes to the company's articles of incorporation.
Following this, the company moved swiftly to withdraw funds. On June 26, Adviotech decided to issue 10 billion won in private convertible bonds for the purpose of acquiring securities from other companies. Just a week later, on July 3, it announced that it had used this money to purchase 12.28% of Onhill's shares for 9.9697 billion won (55,000 won per share).
The issue lies in Onhill's financial condition. As of last year, its accumulated losses reached 14.75397 billion won, nearly depleting its paid-in capital of 14.76579 billion won. In 2025 alone, it reported a net loss exceeding 2.1 billion won, with current liabilities due within a year amounting to 18.3 billion won, while holding only 2.8 billion won in cash, putting it in a liquidity crisis. By purchasing shares in such a company at a high price of 55,000 won per share, Adviotech effectively injected 10 billion won in cash into it.
The duality of the board's actions during the fund allocation process raises further suspicions. Adviotech has reported operating losses for three consecutive years.
Despite its precarious financial state, which necessitates immediate attention to short-term debts, the company paid the 10 billion won purchase price in full on the day of the contract signing for shares destined for the CEO's personal company. In contrast, the expected receipt date for the remaining payment of 3.135 billion won for a convertible bond sale that the company was supposed to receive from external sources was postponed by two months.
The counterparty in this 10 billion won transaction is Hiworks, a retail company with a capital of only 100 million won. Hiworks is a corporation wholly owned by a related party of the CEO of Onhill Pet, a subsidiary of Onhill.
A source in the financial investment industry stated, "Small-cap companies in the KOSDAQ market are vulnerable to stock price manipulation and predatory M&A by unhealthy capital market forces."
* This article has been translated by AI.
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