Financial Services Commission imposes fines on Lutronic and Ssiat Co., Ltd. for accounting standard violations
The Financial Services Commission imposed fines on medical device manufacturer Lutronic and chemical product manufacturer Seed Co., Ltd. for violating accounting standards.
On the 5th, the Financial Services Commission announced that it resolved to impose fines on Lutronic and Seed Co., Ltd. at its 15th regular meeting.
The Financial Services Commission imposed fines of 793.7 million KRW on Lutronic, 162.2 million KRW on three former CEOs, and 84 million KRW on Ilshin Accounting Corporation for negligence in audit procedures. Lutronic's subsidiary was in a state of complete capital erosion and had even received a board resolution for liquidation. However, Lutronic omitted impairment accounting for goodwill and investments in subsidiaries and overstated investments in subsidiaries and loans.
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Seed Co., Ltd. was fined 516.6 million KRW, with 103.2 million KRW imposed on two former CEOs, and 17.5 million KRW on Samwon Accounting Corporation for negligence in audit procedures. Seed Co., Ltd. overstated net income and equity by recognizing sales prematurely or recognizing fabricated sales. Furthermore, it did not record employee embezzlement of company funds as illegal receivables and obstructed external audits by manipulating transaction documents and falsifying inquiry forms.
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