The chief and executives of Maple Semiconductor Inc., once praised as the so-called hidden champion in the South Korean semiconductor industry, are arrested for allegedly committing a 400 billion won ($356.4 million) worth financial crime by inflating the price of faulty wafers, a core component used in electronic devices.

Retail and institutional investors, as well as business partners who have bet on the company`s plan for an initial public offering on the country’s secondary Kosdaq market based on the cooked up financial books together would suffer a financial loss of minimum 100 billion won.

The Korea Customs Service said on Monday that it has arrested three officials including the 50-year-old head of Maple Semiconductor surnamed Park on suspicion of violating customs law and special criminal law on specific economy-related crimes by disguising faulty wafers as standard ones and reporting false export records to receive improper loans and smuggle products. They are also reported to have siphoned off company assets overseas upon facing company crisis.

The Korea Customs Service estimated the value of financial crime that Maple Semiconductor officials appear to have committed would amount to 409.6 billion won. The officials are suspected of overstating the price of defective wafers in which standard ones cost $0.5 per sheet to between $250 and $800 and fabricating sales data by falsely reporting exports on 294 cases since 2011.

Maple Semiconductor, which was established in 2008, was a highly-evaluated company for commercializing the country’s first silicon carbide power semiconductor, but it shocked the market in January by applying for court receivership.

The fallout of the company has reminded investors the scam involving once-promising local startup Moneual that fabricated sales data to draw multi-billion-dollar state guaranty on loans.

By Choi Jae-won and Chun Jung-hong

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]