The Securities and Futures Commission (SFC) under the Financial Services Commission resolved at its 9th meeting on the 8th to take measures such as designating auditors for Seongan Hapseom and Hyundai Heavy Industries Turbo Machinery, which prepared and disclosed financial statements in violation of accounting standards.
According to the SFC, Seongan Hapseom, a polyester raw material manufacturer, falsely recorded accounts receivable to conceal embezzlement and either understated or overstated impairment losses on tangible assets and investments in affiliates.
The SFC decided to recommend the dismissal of executives at Seongan Hapseom, impose an eight-month restriction on securities issuance, levy fines, and designate auditors for two years.
Regarding the auditor, Ankyung Accounting Corporation, the SFC resolved to impose fines, require an additional 50% contribution to the joint damage compensation fund, and restrict audit work related to Seongan Hapseom for three years.
Hyundai Heavy Industries Turbo Machinery, a liquid pump manufacturer, is found to have intentionally overstated cost of goods sold by substituting unsold inventory as cost of sales.
The SFC decided to impose fines on the company and recommend the dismissal of the former responsible executives.
For the auditor, Samjong Accounting Corporation, the SFC resolved to impose fines, require an additional 10% contribution to the joint damage compensation fund, and restrict audit work related to Hyundai Heavy Industries Turbo Machinery for one year.
The imposition of fines on the companies and related parties will be finally decided by the Financial Services Commission in the future.
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