The Sports Seoul Co. was penalized by the financial authorities in the past for embezzlement of funds and violations of accounting standards.
The Financial Services Commission held its second meeting on the 28th and voted to impose a total penalty surcharge of 1.32 billion won on four former executives and employees, including the former CEO of The Sports Seoul Co., for violations of the Act on External Audit of Stock Companies, among others. The action follows investigations and inspections of business reports and related filings.
The penalty surcharge was imposed as follows: 340 million won on the former operations executive who issued execution instructions, 300 million won on the former CEO, and 340 million won each on the former vice president and the former responsible executive.
According to the Financial Services Commission (FSC), The Sports Seoul Co. was found to have overstated shareholders' equity by failing to properly reflect past embezzlement in its financial statements. On a separate basis, the amounts were 2.127 billion won in 2017 and 17.695 billion won in 2018, while on a consolidation basis, the overstatement reached 27.695 billion won in 2018.
Earlier, the Securities and Futures Commission under the Financial Services Commission (FSC) imposed sanctions in Nov. last year on The Sports Seoul Co., including a one-year restriction on securities issuance, a three-year designation of an outside auditor, recommendations tantamount to dismissal (removal) of former and current management, and corrective orders.