Eastar Jet to "Actively Explain" in Response to Ministry of Land, Infrastructure and Transport's Special Audit

[Asia Economy Reporter Hyunseok Yoo] Eastar Jet stated regarding the Ministry of Land, Infrastructure and Transport's special investigation and audit, "We will provide sufficient explanations to promptly resolve any misunderstandings."

Eastar Jet explained this through an official statement in response to the Ministry's press release on the same day.

Eastar Jet said, "During the process of changing the business license following the change of representative in November 2021, we submitted financial-related documents at the request of the Ministry."

They added, "Due to circumstances where the accounting system was shut down and normal financial closing could not be conducted, we reflected figures identifiable under the rehabilitation plan approved by the Seoul Bankruptcy Court in the submitted documents. However, for items such as retained earnings (deficit), which cannot be calculated without closing and are subject to significant fluctuations, we used the most recent available data as of the end of May 2020."

Along with this, they explained, "After restoring the accounting system around February, we conducted an audit for the year-end 2021. During this process, due to an increase in retained earnings (deficit) that could not have been anticipated before closing, differences arose compared to the figures submitted to the Ministry."

They continued, "We will provide sufficient explanations to the Ministry to promptly resolve these misunderstandings. We sincerely apologize to all employees, affiliates, and others who hope for the company’s normalization after the conclusion of the rehabilitation process for causing concern, and we will do our best for a swift return to normalcy."

The Ministry of Land, Infrastructure and Transport announced that it confirmed false information in the accounting documents submitted by Eastar Jet when applying for the international air transport business license change and decided to conduct a special investigation and audit. Although Eastar Jet submitted accounting data in December last year that did not reflect the fact of capital erosion and obtained the license, the audit report disclosed in May showed that the company was in a state of complete capital erosion at that time. The Ministry explained that it will conduct a thorough investigation and audit to determine whether Eastar Jet violated related laws and regulations and will take strict measures based on the results.