SFC Imposes External Auditor Designation and Fines on Kumyang for Accounting Standard Violations

The financial authorities decided today (the 2nd) to impose measures including the designation of an external auditor and fines on Kumyang for violating accounting standards.

The Securities and Futures Commission under the Financial Services Commission announced on the same day that it had resolved to take measures such as designating an external auditor against Kumyang, which prepared and disclosed financial statements in violation of accounting standards.

According to the measures resulting from the investigation and inspection that day, Kumyang recognized false sales by methods such as receiving and issuing false tax invoices as if selling goods without actual inventory transfers.

It was also found that the company overstated its equity capital through consolidated accounting, despite jointly controlling its Mongolian subsidiary with its second-largest shareholder through a shareholders' agreement.

The company obstructed the external audit by presenting false transaction evidence and submitted false data during the inspection.

In response, the Securities and Futures Commission decided to designate an external auditor for three years, impose fines on the company and related parties, recommend the dismissal of one former head of sales and another person, recommend the dismissal of the CEO and three other persons along with a six-month suspension of duties, and take other measures.

In addition, the commission resolved on measures such as a 20% additional accumulation of the joint damage compensation fund for Seonjin Accounting Corporation, which performed the audit work.

(Photo: Provided by Yonhap News TV, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.