Baek Jong-won Apologizes To Shareholders Amid Controversies

On March 28, 2025, Baek Jong-won, CEO of The Born Korea, publicly apologized to shareholders during the company’s first regular shareholders' meeting since its IPO. This meeting, held at Space Share Gangnam Station Center in Seocho-gu, Seoul, was marked by Baek’s commitment to improving shareholder value amid ongoing controversies that have plagued the company.

The Born Korea, which went public on the KOSPI in November 2024, has faced a series of controversies, including issues related to the quality of its products, misleading origin labeling, and violations of the Farmland Act. Baek, who holds 60.78% of the company’s shares, expressed deep regret for the concerns and disappointments these issues have caused among shareholders. "I deeply apologize for causing concern and disappointment to the shareholders due to issues such as the recent controversy over the origin labeling," Baek stated.

During the meeting, shareholders approved the 31st financial statements and the limits on director compensation, both passed as proposed. The Born Korea reported impressive financial results for the previous year, with sales reaching 464.1 billion won and operating profits of 36 billion won, representing increases of 13% and 40.8%, respectively, compared to the previous year.

Despite these positive numbers, the company’s stock price has been volatile. After peaking at 64,500 won on its listing day, the stock fell to a low of 27,800 won on March 17, 2025, due to the controversies. However, following Baek's apology at the shareholders' meeting, the stock price surged by over 14%, trading at 32,950 won by 2:25 PM on the same day, reflecting a 14.41% increase from the previous session.

Baek acknowledged that the controversies, including a discount promotion for the 'Baek Haeng' set that raised eyebrows among consumers and a fine for violating gas safety regulations, have significantly impacted the company’s reputation. He stated, "As a business owner, I am deeply reflecting on my failure to manage the company more meticulously, and I am overhauling the company's internal systems from the ground up." This overhaul includes strengthening the origin management system and collaborating with external experts to enhance transparency.

In addition to addressing the origin labeling issue, Baek committed to improving the company’s menu and services to restore customer trust. He emphasized the importance of open communication with shareholders, promising regular updates on improvement plans and results. "We will enhance communication with shareholders by transparently disclosing improvement plans and results through regular performance reports," he said.

The controversies surrounding The Born Korea have not only affected its stock price but have also raised questions about its operational practices. Baek noted that the company is actively seeking solutions to these issues and aims to improve its public image. He stated, "We are looking for solutions to the issues and aim to improve the company's image."

Furthermore, Baek addressed hygiene concerns that arose from incidents where company practices were deemed unsatisfactory. He acknowledged that some of the actions taken to promote regional festivals, such as using construction materials for grilling and improperly storing sauces, were not up to standard. "The intention was to attract visitors, but from the customers' perspective, these practices were not hygienic," he explained. To prevent similar issues in the future, Baek pledged to ensure safety and prepare adequately for events.

Looking ahead, The Born Korea aims to secure growth momentum by strengthening the competitiveness of its existing business divisions, which include franchises, distribution, and hotels. The company also plans to engage in regional development projects and expand its online distribution business. Baek stated that the company is pursuing mergers and acquisitions, as well as equity investments, to create synergies in the food and beverage sector and food technology.

As Baek concluded the shareholders' meeting, he expressed gratitude for the shareholders' support and reiterated his commitment to addressing the company’s challenges. He noted, "I will do my best to raise the stock price, and we will work hard to show a better side of The Born Korea that shareholders can be proud of." This commitment comes in the wake of a tumultuous period for the company, as it navigates the aftermath of its initial public offering and the challenges that have arisen since.

Overall, Baek's apology and the subsequent rise in stock price indicate that investors are cautiously optimistic about The Born Korea's future. The company’s proactive approach to addressing its issues and enhancing transparency may help it regain the trust of its shareholders and customers alike.