Volvik, a KONEX-listed company that inflated the value of inventories by manipulating inbound and outbound quantities, was hit with a penalty surcharge of more than 2 billion won by financial authorities.
The Financial Services Commission said on the 18th that at its fifth meeting it decided to impose a penalty surcharge of 1.78 billion won on Volvik for preparing and disclosing financial statements in violation of accounting standards. A penalty surcharge of 180 million won and 110 million won was also imposed on the former CEO and the responsible executive, respectively.
According to the Financial Services Commission (FSC), from 2017 to 2021, Volvik inflated year-end inventories by manipulating the quantities of inbound and outbound inventory movements and overstating unit manufacturing costs. It took advantage of the structure in which, in accounting, when inventories increase, cost of sales decreases and net income rises.
It was also determined to have hindered a proper external audit by submitting to the auditor materials in which the inbound and outbound quantities in the inventory ledger were manipulated.
Along with this, the Financial Services Commission (FSC) imposed a penalty surcharge of 170 million won on Anjin Accounting Corp. for neglecting audit procedures.
Earlier, in Jan. this year, the Securities and Futures Commission decided on measures including a three-year designation of an auditor for Volvik and filing complaints with prosecutors against the former CEO and the responsible executive.
Meanwhile, on the same day, the Financial Services Commission (FSC) also imposed a penalty surcharge of 50.2 million won on the unlisted company Ikim, which falsely recorded sales and inventories, and a total of 15 million won on three people including the former CEO.