10 Billion to Former CEO... 1.4 Billion Also Imposed on Samjeong Accounting Corporation
The Financial Services Commission has finalized a penalty of 16.1 billion KRW against Doosan Enerbility for accounting fraud. The former CEO of Doosan Enerbility and Samjong Accounting Corporation, which was responsible for audit duties, were also fined 1 billion KRW and 1.4 billion KRW respectively.
On the 20th, at its 5th meeting, the Financial Services Commission resolved to impose fines on Doosan Enerbility and one other company, as well as company officials and auditors, for preparing and disclosing financial statements in violation of accounting standards, pursuant to the Act on External Audit of Stock Companies and others.
Earlier, on the 7th of last month, the Securities and Futures Commission judged Doosan Enerbility’s accounting fraud as "gross negligence." This was a lower level of severity compared to the Financial Supervisory Service’s initial judgment of "intentional" misconduct.
Based on this judgment, the Securities and Futures Commission imposed fines of 20 million KRW and 12 million KRW on two CEOs respectively, designated a 3-year audit restriction, recommended dismissal of one former CEO, notified the prosecution regarding the company and one CEO, and issued corrective orders. However, the final decision on fines for the company and related parties was deferred to the Financial Services Commission.
Samjong Accounting Corporation, which neglected its audit duties, was also subjected to a 10% additional contribution to the joint damage compensation fund and a one-year restriction on audit duties related to Doosan Enerbility. Three certified public accountants responsible for the audit were each subjected to a one-year restriction on audit duties for Doosan Enerbility, a one-year restriction on designated company audit duties, and mandatory training hours.
From 2017 to 2019, Doosan Enerbility overstated sales or understated construction loss provisions by underestimating the total estimated construction costs for some overseas construction projects. Additionally, it neglected impairment evaluations on investments in subsidiaries, resulting in understated impairment losses, failed to submit some documents requested by supervisory agencies, and used financial statements prepared in violation of accounting standards in securities reports submitted from 2018 to 2022.
Meanwhile, on the same day, the Financial Services Commission also imposed a fine of 6 billion KRW on Hansol I-Wons for preparing financial statements in violation of accounting standards. Four individuals, including the former CEO, were fined a total of 1.6 billion KRW.
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