The Financial Services Commission announced on October 7 that it has imposed a fine of 7.633 billion won (approximately $76 million) on Geumyang for violations of accounting standards in its financial statements.
During its 17th meeting, the commission also decided to impose fines of 733 million won on Geumyang's CEO, 463.8 million won on the former finance officer, and 39.2 million won each on the former sales officer, the former disclosure officer, and the former management assessment officer. Additionally, a fine of 177.2 million won was levied on the internal auditor.
According to the commission, Geumyang issued false tax invoices to create fictitious sales without transferring actual inventory assets.
The company also overstated its equity by conducting consolidated accounting despite jointly controlling a Mongolian subsidiary through a contract with its second-largest shareholder and other shareholders.
Geumyang committed accounting errors by failing to recognize impairment losses on its investment in joint ventures. Although signs of deteriorating operating profits were detected at the Mongolian subsidiary, the company did not recognize the impairment losses, leading to inflated equity.
During external audits, Geumyang obstructed the process by presenting false transaction evidence in collusion with its clients and submitted falsified receipts while falsely claiming that it did not interfere with inventory audits.
In addition to the fines, the commission has mandated a three-year designation of an auditor for Geumyang and recommended the dismissal of the CEO and three other executives, along with a six-month suspension of their duties.
The company, its CEO, and the former finance officer have been referred to prosecutors, while the former sales officer and two others are subject to notification to the prosecution.
On the same day, the commission decided to impose a fine of 733.7 million won on Ascendio, along with a three-year auditor designation and a recommendation for the dismissal of the former finance officer.
Ascendio was criticized for neglecting to assess impairment on its subsidiary investments despite signs of impairment.
The auditing firm Taeyul Accounting Corporation, which was lax in its audit procedures for Ascendio, was fined 80 million won and required to increase its joint compensation fund by 50%.
Additionally, Seonjin Accounting Firm faced a fine of 22.5 million won and a 20% increase in its joint compensation fund for violating important audit procedures.
* This article has been translated by AI.
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