Financial authorities imposed a penalty surcharge of 20.5 billion won and 8.4 billion won, respectively, on Young Poong(000670) and Korea Zinc(010130), which violated accounting standards.
The Financial Services Commission said on the 15th that at its 13th meeting it voted to impose a penalty surcharge on the companies Young Poong and Korea Zinc, their related parties, and their auditors for preparing and disclosing financial statements in violation of accounting standards.
Young Poong was found to have understated provisions related to the expense of remediating soil and groundwater contamination at the Seokpo Smelter and surrounding areas, and it also failed to properly reflect impairment losses on property, plant, and equipment due to the smelter's suspension of operations. Financial authorities imposed a penalty surcharge of 20.4741 billion won on Young Poong and 1.5115 billion won on four people, including the former CEO.
Daiju Accounting Corporation, which was Young Poong's external auditor at the time, was found responsible for neglecting audit procedures and was imposed a penalty surcharge of 1.068 billion won.
Korea Zinc was found to have recognized less than the actual amounts despite declines in valuation losses on investment assets, impairment losses, and the recoverable amount of a subsidiary, and to have omitted disclosures of transactions with related parties in the notes. It also was found to have impeded the auditor's normal external audit by not providing key details of a subsidiary's convertible bonds (CB). Financial authorities imposed a penalty surcharge of 8.4291 billion won on Korea Zinc and 763.2 million won on two people, including the CEO.
Earlier, the Financial Services Commission (FSC) convened the Securities and Futures Commission on Jun. 10 and voted to designate auditors for the two companies for three years. At the same time, for Young Poong, it also issued a recommendation tantamount to dismissal of the former CEO, recommended dismissal (removal) of the responsible executive and former responsible executive and imposed a six-month suspension from duties. For Korea Zinc, it voted on corrective action requests along with a recommendation to dismiss (remove) the responsible executive and a six-month suspension from duties.