[Asia Economy Reporter Park Ji-hwan] The Securities and Futures Commission under the Financial Services Commission held its second meeting on the 20th and decided on measures against Nanos for preparing and disclosing financial statements in violation of accounting standards, including an 8-month restriction on securities issuance and a 2-year designation of auditor.
Nanos was pointed out for issues in its 2015 financial statements such as overstatement of inventory assets, failure to disclose contingent liabilities related to guarantees for special related parties, understatement of impairment on tangible and intangible assets, and understatement of allowance for doubtful accounts related to receivables from subsidiaries.
Specifically, Nanos issued promissory notes as guarantees for accounts payable of its subsidiary, a Philippine corporation, but did not disclose this in the notes to the financial statements. Additionally, due to overstatement of inventory assets, the net assets of the subsidiary were overstated, and despite prolonged delays in collection of receivables and difficulties in recovery, impairment assessments were not properly conducted, resulting in understatement of allowance for doubtful accounts.
The Securities and Futures Commission stated, "The recommendation for dismissal of the former responsible executive is replaced by notification of illegal acts to the retired person, as the subject of the measure has resigned."
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