Dongsung Finetec said on the 30th in a statement regarding violations of accounting standards, "We sincerely apologize for causing concern to shareholders, investors, customers, and partner companies who have trusted and supported us," and "We fully recognize our responsibility for failing to prevent this."
The Securities and Futures Commission under the Financial Services Commission (FSC) decided the previous day that Dongsung Finetec violated accounting standards in 2022 and 2023, and resolved to designate an outside auditor for three years, recommend the dismissal of the former responsible executive, and notify prosecutors. Dongsung Finetec is suspected of violating financial statement standards by manipulating the percentage-of-completion for contract work or understating net income when converting foreign currency.
The Korea Exchange (KRX), in line with the Securities and Futures Commission's finding, initiated a substantive review of listing eligibility for Dongsung Finetec. Trading in Dongsung Finetec shares was suspended starting today.
Dongsung Finetec explained that it immediately took personnel action against those involved as soon as it recognized the violations of accounting standards. It also restated and disclosed its financial statements and separated the Finance Department, which handles accounting, from the Management Support Office, which handles internal accounting reviews. It newly created a Compliance and Ethics Team within the Management Support Office to strengthen oversight and checks.
Dongsung Finetec, with advice from an external accounting firm, upgraded its internal accounting management system and introduced an internal reporting system that allows anonymous reports of illegal or unethical conduct. It also decided to strengthen training on the accounting management system for executives and employees.
To resume trading, Dongsung Finetec plans to actively provide explanations to the Korea Exchange (KRX). Dongsung Finetec said, "Through this incident, we will remain vigilant and reexamine our overall internal operations to prevent similar situations from occurring, and we promise to be reborn as a more transparent and trusted company."