[Asia Economy Reporter Ji Yeon-jin] The Securities and Futures Commission under the Financial Services Commission held a regular meeting on the 18th and decided to file charges with the prosecution against the unlisted corporation 'Lead' and four individuals including the former CEO.
According to the Securities and Futures Commission, Lead, a manufacturer of display manufacturing machinery, falsely recorded approximately 80 billion KRW as loans to conceal embezzlement by management during 2017-2018.
It was also investigated that the company fabricated guarantee documents to understate allowance for doubtful accounts and disguised the outflow of company funds as machinery purchases. The company also obstructed external audits by overstating sales or submitting false tax invoices. The Securities and Futures Commission filed charges against the former CEO and three others, and resolved to impose a 12-month restriction on securities issuance, a fine of 48 million KRW, and a 3-year auditor designation. The final decision on penalties for company officials will be made later by the Financial Services Commission.
On the same day, the Securities and Futures Commission resolved measures against the KOSDAQ-listed company 'CNT85' (formerly Poslink), including a 6-month restriction on securities issuance, a fine of 375 million KRW, a 2-year auditor designation, and corrective orders. A penalty of 10 million KRW was also imposed on the former CEO of the company.
CNT85, a resource development and sales company, was found to have inflated sales and cost of sales and understated allowance for doubtful accounts on loans during 2015-2017.
The Securities and Futures Commission also resolved measures against KS Wallpaper (formerly FT Wallpaper), a wallpaper manufacturing and sales company, including an 8-month restriction on securities issuance and a 2-year auditor designation. The company and two individuals including the former CEO will be reported to the prosecution.
KS Wallpaper overstated selling and administrative expenses in 2016 and obstructed external audits by submitting false business plans to the auditor to conceal this.
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