Speech-recognition software vendor Lernout & Hauspie Speech Products NV continues to suffer internal turmoil. The company has suspended Joo Chul Seo as president and general manager of L&H Korea and removed him as a director of L&H Korea, it announced on Thursday.
On Wednesday, the company announced that Seo is being investigated for apparently misusing US$30 million of the FLV Fund, a venture capital fund affiliated with L&H, as collateral for personal loans. The suspension is effective immediately and Seo has been relieved of all responsibilities, L&H said in a statement.
The FLV Fund, which is not yet operational, pending approval of South Korea's Ministry of Industry, is focused on speech, artificial intelligence and language technology.
L&H also confirmed the resignations from its board of directors of the company's former Chief Executive Officer and President Gaston Bastiaens, former Co-Chair and Managing Director Pol Hauspie and former Managing Director Nico Willaert.
Company co-founders Jo Lernout and Hauspie stepped down from their positions as co-chairmen and managing directors on Nov. 9 and Bastiaens, who had been the company's CEO for four years, resigned on Aug. 25. Bastiaens was replaced by John Duerden, formerly the president and CEO of L&H's Health Care Solutions Group. L&H is facing a host of other woes including an investigation by the U.S. Securities and Exchange Commission of the company's accounting practices in the U.S., as well as an audit of previously reported sales figures for South Korea. The audit follows allegations in the Asian Wall Street Journal that the company inflated sales figures and falsified its list of customers. L&H denied those allegations as well as similar charges that were made concerning the company's business in Singapore.
Trading in L&H's shares has also been suspended indefinitely in Europe and in the U.S.
Dong-Hee Kim, formerly a vice-president with the enterprise & telephony solutions division, has been appointed to take over Seo's responsibilities at L&H Korea while the investigation continues, L&H said.