The Financial Services Commission decided to impose a penalty surcharge on Hanchang and The Technology for violating accounting standards.
The Financial Services Commission (FSC) said it held its 11th regular meeting on the 17th and resolved to impose a penalty surcharge on Hanchang and The Technology (formerly Hanchang Biotech) and related company officials, under the Act on External Audit of Stock Companies and others, for preparing and disclosing financial statements that violated accounting standards.
The Financial Services Commission (FSC) imposed a penalty surcharge of 815.8 million won on Hanchang and a total of 21.8 million won on two people, including the former CEO of The Technology. Earlier, the Securities and Futures Commission on Apr. 9 imposed a penalty surcharge of 103 million won on two people, including the former CEO of Hanchang, and 289.8 million won on The Technology.
Along with this, the Financial Services Commission (FSC) took measures equivalent to recommending dismissal (removal) for former executives of the two companies and resolved to designate auditors for three years.
Hanchang is accused of overstating sales and cost of sales and failing to include notes related to payment guarantees during the 2021–2022 settlement of account. The company was found to have recognized simple distribution transactions as sales, overstating sales by 10 billion won in 2021 and 16.5 billion won in 2022.
The Technology was found to have falsely recorded merchandise sales and cost of sales of 2.4 billion won in 2021 and 2.2 billion won in 2022. It padded sales by arranging transactions to make it appear that products were normally sold to partner companies and is also suspected of obstructing external audits by not submitting payment guarantee letters of commitment to conceal the fact of distribution sales.