The Securities and Futures Commission under the Financial Services Commission announced that at its 4th meeting held on the 25th, it resolved to impose measures including a two-year designation of auditor on the unlisted company Gukbo Co., Ltd., which had prepared and disclosed financial statements in violation of accounting standards.
Gukbo, a freight truck transportation company, was found to have, in 2019, recognized company-issued promissory notes provided as collateral for a subsidiary as loans and trade payables, and to have set up allowance for doubtful accounts on loans to subsidiaries, including the above loans, without appropriate procedures to review their collectability.
In addition, it overstated prepaid expenses related to convertible bonds and bonds with warrants, and used financial statements that violated accounting standards in its small public offering disclosure documents.
Accordingly, the Securities and Futures Commission resolved to designate an auditor for two years, impose an administrative fine of 36 million won, and issue a corrective order. The imposition of surcharge on the company and two related persons will be finally decided later by the Financial Services Commission.
At the same time, the Securities and Futures Commission resolved to impose measures on Shinwoo Accounting Corporation, which, as Gukbo's auditor, neglected its audit procedures, including a two-year restriction on audit work for the company in question and an additional 20% contribution to the joint compensation fund.
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