This article was displayed on the ChosunBiz MoneyMove (MM) site at 4:26 p.m. on Dec. 23, 2025.
With the Financial Supervisory Service missing the deadline to conclude its accounting audit of Korea Zinc and Young Poong, plans to convene the audit committee in January have been postponed again.(Related article☞[Exclusive] Financial Supervisory Service extends Korea Zinc·Young Poong accounting audit... first since announcing the '1-year limit' principle)
According to the investment bank (IB) industry on the 23rd, the Financial Supervisory Service has decided not to refer the results of the accounting audit of Korea Zinc and Young Poong to the audit committee on Jan. 16. It has not yet been decided whether to bring it to the committee in mid-February.
Previously, the Financial Supervisory Service began an accounting review of Korea Zinc and Young Poong in Oct. last year and shifted to an accounting audit in Nov. For Korea Zinc, the audit reportedly covers whether losses from an investment in the One Asia Partners fund were properly reflected in the financial statements and whether the valuation at the time of acquiring Ignio Holdings was overstated. For Young Poong, the audit covers whether the expense of treating waste from the Seokpo Smelter was properly reflected as a provision.
In principle, after completing the accounting audit on Nov. 27, the Financial Supervisory Service should have prepared an opinion based on the audit results and forwarded it to the committee. However, this has been unusually extended.
According to the accounting audit advancement plan released by the financial authorities in 2022, the audit investigation period is limited to one year and may be extended with prior approval from the governor of the Financial Supervisory Service when there are "inevitable reasons." Since the Financial Supervisory Service released this principle, this Korea Zinc·Young Poong case is the first in which the audit period has actually been extended.
The Financial Supervisory Service is in fact continuing to delay referring the case to the committee. In mid-month, it did not put the Korea Zinc·Young Poong case on the agenda, citing a heavy workload. After sending guidance on audit procedures to each company on the 19th and planning to hold the committee on Jan. 16 next year, this too has been postponed again.
Under accounting audit procedures, once the committee meets, it is customary to bring the case to the Securities and Futures Commission (SFC) about one month or a month and a half later. For Korea Zinc·Young Poong, the committee would open no earlier than mid-February, so it would reach the SFC in mid- or late March. However, since it has not been decided whether to convene the committee in February, the likelihood of a conclusion before Korea Zinc's regular shareholders meeting in late March is effectively low.
The criteria for determining the seriousness of violations in an accounting audit are generally divided into three levels: intent, gross negligence, and negligence. Intent applies when accounting fraud is recognized and information is deliberately manipulated; gross negligence applies when the duty of care is markedly violated; and negligence applies when carelessness or errors occur in the course of work. If it is determined to be intentional accounting fraud, high-level sanctions such as recommending the dismissal of the CEO or the responsible executive may follow.