This article was posted on ChosunBiz MoneyMove (MM) at 7:35 p.m. on Feb. 12, 2026.
The audit committee under the Financial Services Commission discussed accounting inspections for Korea Zinc and Young Poong, but deferred judgment and decided to reconsider the matter on March 5. The Financial Supervisory Service is known to have judged that both companies had intent in their accounting fraud, but because the companies' defenses were prolonged, the committee was unable to reach a conclusion.
On the 12th, according to the investment banking industry and financial authorities, the audit committee simultaneously placed the accounting inspection items for Korea Zinc and Young Poong on the agenda, deliberated until late afternoon, and decided to reach a conclusion on March 5.
Earlier, the FSS launched an accounting review of Korea Zinc and Young Poong in Oct. 2024 and converted it to an accounting inspection in Nov. For Korea Zinc, the inspection targets include whether losses from its investment in the One Asia Partners fund were properly reflected in the financial statements and whether the valuation recorded at the time of the acquisition of Ignio Holdings was overstated. For Young Poong, the inspection target is whether the cost of disposing waste from the Seokpo smelter was properly reflected as a provision.
According to the industry, the FSS is believed to have judged Korea Zinc's accounting fraud at about 230 billion won and Young Poong's amount not set aside as provisions at about 100 billion won.
The FSS reported that it found both companies' violations of accounting standards to be intentional and sent preliminary notices to each company and their auditors. However, in the auditors' case, it was conveyed that the matter was judged to be due to an estimation error in amounts and therefore lacked intent, and that the auditors are expected to face lower-level sanctions than the companies.
If intentional violations of accounting standards are confirmed, companies may face sanctions such as imposition of a penalty surcharge, designation of auditors, recommendations for dismissal of the CEO and finance executives, and suspension of duties (in principle within six months). Depending on the importance of the matter, prosecution referral or notification to prosecutors may also be imposed.
However, in the cases of Korea Zinc and Young Poong, it was reported that recommendations for dismissal and suspension of duties applied only to finance executives, not to the CEOs.
With no conclusion at the audit committee meeting that day, it has become virtually impossible for the accounting inspection results of the two companies to be finalized before the March regular shareholders' meetings. Typically, about a month to a month and a half after the audit committee's resolution, the matter is submitted to the Securities and Futures Commission, where the companies are given another opportunity to present their case.