Young Poong and Korea Zinc have been fined 20.4741 billion won and 8.4281 billion won, respectively, by financial authorities for violating accounting standards.

The Financial Services Commission announced on July 15 that, during its 13th meeting, it decided to impose these fines on Young Poong and Korea Zinc for preparing and disclosing financial statements in violation of accounting standards.

Fines of 1.5115 billion won were imposed on four individuals, including the former CEO of Young Poong, while Daejoo Accounting Corporation was fined 1.068 billion won.

Two individuals, including the CEO of Korea Zinc, were fined 763.2 million won.

According to the Securities and Futures Commission, Young Poong failed to recognize legal obligations for soil remediation around its smelter as provision liabilities from 2021 to 2022. Furthermore, in 2023 and 2024, the company underestimated these provision liabilities by using remediation methods not permitted under regulations.

Young Poong also failed to recognize provision liabilities regarding orders to remediate contaminated soil in forests near the smelter and obligations to remediate soil beneath the buildings of its No. 1 and No. 2 smelter plants.

In addition, the company underestimated provision liabilities related to groundwater remediation.

It was also found that Young Poong understated impairment losses in its impairment assessments related to the suspension of smelter operations from 2022 to 2024.

Korea Zinc was found to have underestimated valuation losses by reporting them as smaller than they actually were, despite a decrease in the fair value and recoverable amount of its financial instruments and investments in associates.

Other issues identified included the underestimation of impairment losses related to goodwill of overseas subsidiaries and the obstruction of external audits.

Previously, the Securities and Futures Commission had already taken measures against the two companies, including a three-year designation of auditors, recommendations for the dismissal of executives, and suspension of duties.

(Photo: Provided by Financial Services Commission, Yonhap News)