[Asia Economy Reporter Park Jihwan] The financial authorities have referred Winia Dimchae, a KOSDAQ-listed company that prepared and disclosed financial statements in violation of accounting standards, to the prosecution.
On the 27th, the Securities and Futures Commission under the Financial Services Commission held its first extraordinary meeting the previous day and resolved to take measures such as prosecution referral and auditor designation against three companies, including Winia Dimchae, which prepared and disclosed financial statements in violation of accounting standards.
According to the Securities and Futures Commission, Winia Dimchae overstated sales and cost of sales from 2015 to 2018. While directly managing unsold product inventory held by specialty stores, the company arbitrarily adjusted returned or exchanged products in its computer system. In addition, even after exempting the repayment obligation for product purchase payments from specialty stores, the company overstated sales and cost of sales by not reversing the already recognized sales revenue.
The Securities and Futures Commission resolved to impose a fine of 10 million KRW on the former CEO of Winia Dimchae, recommend dismissal of the responsible executive, and refer the company and the former CEO to the prosecution. For the auditor, Samil Accounting Corporation, a fine of 306 million KRW, an additional 20% contribution to the joint damage compensation fund, and a two-year restriction on audit work for Winia Dimchae were also imposed.
On the same day, the Securities and Futures Commission imposed a 10-month restriction on securities issuance on Daehan Electric Wire due to underestimation of allowance for doubtful accounts on accounts receivable.
Regarding Secube, the commission resolved to impose fines, designate an auditor for three years, and refer the company and the former CEO to the prosecution for false reporting of sales and cost of sales.
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