Kolon TissueGene shareholders lose series of damages suits over 'Invossa scandal'

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[Financial News] Shareholders of Kolon TissueGene who suffered heavy losses in the "Invossa (Invossa-K) scandal" filed damages suits, but their claims have once again been rejected.
On the 5th, Civil Division 30 of the Seoul Central District Court, presided over by Judge Kim Seok-beom, dismissed in full a damages claim of about 6.5 billion won filed by 241 shareholders of Kolon TissueGene and Kolon Life Science against Kolon Life Science and others, ruling against the plaintiffs.
The court also ruled against the plaintiffs in another case where 1,082 shareholders sought damages from Kolon TissueGene and former Kolon Group chairman Lee Woong-yeul.
Shareholders harmed by the Invossa scandal have brought a series of damages suits against Kolon TissueGene, related companies, and management, but they have been losing case after case. The same panel last month also ruled against the plaintiffs in an 8.6 billion won damages suit filed by about 500 shareholders against Kolon TissueGene and the former chairman.
This appears to reflect the outcome of a similar case decided in December last year. At that time, the court stated, "Even if the components changed, the efficacy did not change, nor did any particular harmfulness, and there was no false statement or omission of information material to an investment decision," and it ruled against more than 170 shareholders who had sought about 6.4 billion won in damages.
The Invossa scandal centers on Invossa, a gene therapy for knee osteoarthritis developed by Kolon TissueGene, a U.S. subsidiary of Kolon Life Science. The treatment, which was said to contain human cartilage cells, received approval from the Ministry of Food and Drug Safety (MFDS) in 2017. However, in 2019 it was revealed that one of its main components consisted of kidney cells rather than cartilage cells, leading to the cancellation of its approval and a sharp plunge in the company’s share price.
Shareholders argued that Kolon TissueGene and Kolon Life Science were aware that Invossa’s main component had changed but nonetheless issued false disclosures, and they filed lawsuits on that basis.
Kolon TissueGene’s executives and managers were also tried in a separate criminal case, but they were acquitted.
theknight@fnnews.com Jung Kyung-soo Reporter