GungHo Online Entertainment updates on former executive's misconduct investigation

GungHo Online Entertainment has issued an update on its response to the misconduct involving a former executive-level employee, initially disclosed on August 14, 2025. The company confirmed that the fraudulent activities, which involved diverting company funds through fictitious business orders, were not systemic. GungHo is implementing preventative measures and cooperating with investigative authorities.

To prevent future occurrences, GungHo has restructured its organization and decentralized authority to address the concentration of power that contributed to the incident. This includes the abolition of the department where the former employee worked in June and the reassignment of its functions. The company aims to complete these measures, including the distribution of authority and mutual monitoring systems, by March 2026.

Additionally, GungHo has enhanced internal controls for transactions with external vendors, revising approval limits for department managers in October and strengthening payment approval processes since August. The company has also reinforced its internal audit function, conducting specific audits to verify transaction realities in addition to regular annual audits.