'False Disclosure of Business Plans' Geumyang Designated as an Unfaithful Disclosure Corporation...Fines and Penalty Points

Geumyang has been designated as a non-compliant disclosure corporation due to false disclosure of management plans.

According to the Korea Exchange on the 29th, Geumyang was designated as a non-compliant disclosure corporation the previous day for falsely or incorrectly disclosing future business and management plans. It was penalized with 10 penalty points and a fine of 200 million KRW for disclosure violations.

Due to the penalty points, Geumyang's trading was suspended for the day. The trading suspension will be lifted at 9 a.m. on the 30th.

This designation as a non-compliant disclosure corporation stems from controversy over Geumyang inflating the estimated performance figures of a Mongolian mine related to the memorandum of understanding signed last May to acquire shares in Mongla, a Mongolian mining development company.

Earlier, on the 27th of last month, Geumyang revised downward its sales and operating profit forecasts for the Mongolian mine this year from 402.4 billion KRW to 6.6 billion KRW, and from 161 billion KRW to 1.3 billion KRW, respectively.

When designated as a non-compliant disclosure corporation, penalty points and fines are imposed, and if penalty points accumulate, the company may be designated as a management item. If similar cases recur after being designated as a management item, the company may be subject to delisting review.

Geumyang stated on the day, "Due to judgment errors caused by trial and error in overseas mining projects, along with adverse factors such as contraction in the global battery market, delays in overseas supplier orders and overseas financing continued, failing to meet shareholder support and market expectations. We deeply feel responsible and sincerely apologize to our shareholders and customers."

Meanwhile, it was revealed that CEO Lee Hyang-du of Geumyang sold all his shares before the trading suspension. On the same day, Geumyang disclosed that CEO Lee sold 2,789 shares of Geumyang on the market on the 24th and 25th.

Additionally, Geumyang's subsidiary, SMLab, voluntarily withdrew its preliminary review for listing on KOSDAQ on the same day.