Financial Services Commission imposes fines on 4 companies for 'accounting standard violations'

[Asia Economy Reporter Lee Jung-yoon] The Financial Services Commission held its 7th regular meeting on the 13th and resolved to impose fines on four companies including G2R, related parties, and accounting firms for preparing and disclosing financial statements in violation of accounting standards. The Securities and Futures Commission under the Financial Services Commission decided to designate auditors and impose fines on these four companies, and the amount of fines was determined on the same day.

The Financial Services Commission decided to impose a fine of 1.7483 billion KRW on G2R, 524.4 million KRW on three individuals including the former CEO of G2R, and 117.6 million KRW on the external auditor Samjong Accounting Corporation. According to the Financial Services Commission, from 2012 to the first quarter of 2019, G2R's subsidiary's financial statements understated accounts payable equivalent to embezzled amounts, which was reflected as is, resulting in an overstatement of consolidated equity capital.

For HS Ad, a fine of 1.2488 billion KRW was imposed, and Samjong Accounting Corporation was fined 78.7 million KRW. From 2012 to 2018, the person in charge of funds at HS Ad embezzled 50.3 billion KRW over seven years, causing accounts payable to be understated, but this was not detected, leading to an overstatement of equity capital.

Additionally, a fine of 1.4137 billion KRW was imposed on Yesco Holdings, and 282.6 million KRW on two individuals including the former CEO.

Furthermore, SD Life Science was fined 386.2 million KRW, and 77.2 million KRW was imposed on two individuals including the CEO. Shinhan Accounting Corporation was also fined 63 million KRW.

Yesco Holdings did not reflect the fair value loss of financial assets through profit or loss in the financial statements from 2018 to 2019. In the 2018 financial statements, incorrect assumptions were applied, resulting in an understatement of goodwill impairment losses. SD Life Science accounted for the losses of its invested subsidiaries in a reduced manner in the 2018 and 2019 financial statements.