FSC Imposes 740 Million Won Fine on Panakeia for Accounting Violations

The Financial Services Commission announced on the 14th that, during its 9th meeting, it decided to impose a fine of 740 million won and designate an auditor for two years against Panakeia for preparing and disclosing financial statements in violation of accounting standards.

Previously, Panakeia had acquired bonds with warrants (BW) issued by its subsidiary and embezzled the proceeds from the bond acquisition through the subsidiary. Despite the loss of recoverability of the BW, the company accounted for them as normal assets, resulting in an overstatement of financial assets by 4.943 billion won in the third quarter of 2018 and 2019. The company was delisted from the KOSDAQ market in June last year.

Accordingly, the Financial Services Commission imposed a fine of 740 million won on the company, designated an auditor for two years, recommended dismissal of all former responsible executives, notified the prosecution of both the company and the former responsible executives, and issued a corrective order. Additionally, a fine of 310 million won was imposed on five company officials, including the former CEO.

Furthermore, for Yejih Accounting Corporation, which neglected audit procedures during the external audit process, the commission decided to impose a fine of 100 million won, require an additional 20% contribution to the joint compensation fund, and restrict the firm from auditing the company for two years.