SEOUL (REUTERS) - The chairman of a major South Korean dairy company stepped down on Tuesday (May 4) after police launched an investigation into the company's assertion that its yogurt drink was effective in fighting the coronavirus.

Namyang Dairy Product Chairman Hong Won-sik's resignation came three weeks after the initial claim and its retraction. The sacking of the chief executive did little to calm a consumer backlash.

"I will resign from Namyang Dairy's chairman position to take responsibility for all of this and I will not pass on management to my children," Mr Hong said in a televised public apology.

Mr Hong and his family members have a combined stake of 53.1 per cent of South Korea's No. 3 dairy firm by revenue, according to Namyang's regulatory filings.

Officials at Namyang Dairy could not be immediately reached for comment.

Seoul police last week raided the company's headquarters.

The company claimed at a forum attended by reporters last month that its Bulgaris yogurt drink was effective in preventing Covid-19, sending its stock surging nearly 30 per cent.

South Korea's Ministry of Food and Drug Safety subsequently issued a statement saying that Namyang had no evidence to support its claim, and accused the company of illegally spreading misleading information.

Namyang Dairy shares were up 16.3 per cent versus the broader Kospi's 0.5 per cent decline on Tuesday morning.