South Korea Fines YK, KORAMCO Over 28 Billion Won for Accounting Violations

South Korea's Financial Services Commission has levied significant fines on YK and KORAMCO for serious accounting violations, totaling over 28.8 billion won. YK faces the larger penalty of 20.47 billion won, while KORAMCO must pay 8.43 billion won.

The commission's decision, made during its 13th meeting, targets accounting standard breaches in financial statement preparation and disclosure. YK is cited for failing to adequately reflect costs for cleaning contaminated soil and groundwater around its smelter and for understating losses due to operational shutdowns affecting asset values.

KORAMCO's violations include understating losses from declining values of financial instruments and investments in affiliated companies. The company also failed to disclose certain transactions with special-related parties and did not sufficiently account for asset value declines in its overseas subsidiaries. Internal accounting control systems were found to be ineffective, and external audits were obstructed.

These financial penalties follow earlier actions by the Securities and Futures Commission, which recommended a three-year ban on auditors, dismissal of executives, and suspension of duties for individuals involved. The fines extend to YK's former CEO and three others, totaling 1.51 billion won, and Daeyoung Accounting Corp., its auditor, which received a 1.07 billion won fine. KORAMCO's CEO and a responsible executive were fined 487.9 million won and 275.3 million won respectively, amounting to a total of 763.2 million won.