6-K 1 htm_823.htm LIVE FILING GRAVITY Co., Ltd. - Form 6-K

Washington, D.C. 20549

Form 6-K

PURSUANT TO RULE 13a-16 OR 15d-16

For the month of October, 2005

(Translation of registrant’s name into English)
Shin-Gu Building, 620-2 Shinsa-Dong, Gangnam-Gu, Seoul, 135-894, Korea
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:  [x] Form 20-F    [ ] Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  [ ]
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:  [ ] Yes    [x] No
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):    n/a 

SEOUL, South Korea, October 18, 2005 - Gravity Co., Ltd. (NASDAQ: GRVY), an
online game developer and distributor, today announced that the Company is
currently conducting an investigation into certain irregular activities.  The
Company was recently informed by EZER, Inc., who recently acquired majority
shares from former Chairman Jung Ryool Kim, that certain royalty payments paid
to the Company from licensees of the Company’s principal product, Ragnarok
Online, were not accounted for in its financial statements.

The audit committee, which consists of independent directors who were
appointed to Gravity’s board since September 2005, has begun an independent
investigation into this matter.  It has retained the law firm of Cleary
Gottlieb Steen & Hamilton LLP as its advisor and a Korean law firm, Woo Yun
Kang Jeong & Han (“Woo Yun”) as the independent investigator, and Woo Yun has
also retained a Korean accounting firm Deloitte Anjin LLC to provide
assistance in accounting matters.

Former Chairman Jung-Ryool Kim acknowledged that approximately USD 6 million,
were diverted over the past few years and voluntarily paid approximately USD
7.3 million or KRW 7.8 billion (representing the funds he claims to have been
diverted together with assumed interest at a rate of 6 percent per annum) to
the Company on October 17, 2005.

Current CEO, Il Young Ryu, stated that “we don’t know the full details
surrounding the incident and the audit committee is currently conducting
a full scale investigation. Appropriate authorities have already been
notified and the Company will announce the findings from the investigation
as soon as more facts are discovered.”  The Company is assessing the impact
of these matters on its outstanding financial statements for prior periods.

About GRAVITY Co., Ltd.

Based in Korea, Gravity is a developer and distributor of online games. The
Company's principal product, Ragnarok Online, is currently commercially
offered in 20 markets.  It is a popular online game especially in Japan,
Taiwan, and South-East Asian countries.  For more information visit

Forward-Looking Statements:

Certain statements in this press release include forward-looking statements
within the meaning of the U.S. Private Securities Litigation Reform Act of
1995. Forward-looking statements generally can be identified by the use of
forward- looking terminology, such as “may,” “will,” “expect,” “intend,”
“estimate,” “anticipate,” “believe,” “project” or “continue” or the
negative thereof or other similar words.  All forward-looking statements
involve risks and uncertainties, including, but not limited to, the ability to

diversify revenue, ability to collect license fees and royalty payments from
overseas licensees and in a timely manner; ability to acquire, develop,
license, launch, market or operate commercially successful online games;
competition from companies that have greater financial resources; introduction

of new products into the marketplace by competitors; the ability to recruit
and retain quality employees as Gravity grows; and economic and political
conditions globally. Actual results may differ materially from those discussed

in, or implied by, forward-looking statements. The forward-looking statements
speak only as of the date of this release and Gravity assumes no duty to
update them to reflect new, changing or unanticipated events or circumstances.


In Korea:
John C. Chung
Tel: 82-2-3485-1002

In the U.S.:
David Pasquale, EVP
The Ruth Group
Tel: +646-536-7006

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
    GRAVITY Co., Ltd.
Date: 10/18/2005 By: /s/John C. Chung

  Name:  John C. Chung
  Title: Investor Relations Officer