The Financial Services Commission noted that on 14th, it held a regular meeting and decided to impose a penalty surcharge on Panakeia and company officials, as well as the auditor for violating accounting standards in the preparation and disclosure of financial statements.
Panakeia, a special purpose machinery manufacturer, acquired convertible bonds issued by a wholly-owned subsidiary that had been in a complete capital impairment state from 2018 until the third quarter of 2019, and recorded them as normal assets despite the lack of recovery potential. This led to an overstatement of net income and equity by 4.9 billion won.
Accordingly, the Financial Services Commission decided to impose a total penalty surcharge of 1.05 billion won, including a penalty surcharge of 740 million won on Panakeia and 310 million won on five individuals, including the former CEO. Additionally, a penalty surcharge of 100 million won will be imposed on the auditor, Yejy Accounting Firm.
Earlier, the Securities and Futures Commission decided on the recommendation for the dismissal of the former chief financial officer of Panakeia, notification to the prosecution regarding the company and the former chief financial officer, and designation of the auditor for two years.