Young Poong, Korea Zinc Fined 20.4 Billion, 8.4 Billion Won for "Violation of Accounting Standards"

Young Poong and Korea Zinc, currently embroiled in a management rights dispute, have each been hit with fines for "violating accounting standards"—Young Poong faces approximately 20.4 billion won, while Korea Zinc is subject to around 8.4 billion won in penalties.

On July 15, the Financial Services Commission, during its 13th meeting, decided to impose fines on Young Poong, Korea Zinc, Hankyul LS, and Myungga Dairy Products, as well as their associated officers and auditors who neglected external audit procedures, for preparing financial statements in violation of accounting standards.

Four individuals, including the former CEO of Young Poong, have been fined a total of 1,511.5 million won, and Daewoo Accounting Corporation, the responsible audit firm, has been fined 1,068 million won. Korea Zinc’s CEO and responsible executive have been fined 487.9 million won and 275.3 million won each, totaling 763.2 million won.

Young Poong was found to have under-recognized provisions for soil remediation around its smelter facilities, forest land, and the areas beneath the smelter from 2021 to 2024. In addition, Young Poong failed to properly reflect impairment losses on tangible assets at its Seokpo smelter.

Korea Zinc also under-recognized valuation losses on investment assets and did not recognize certain losses on the goodwill of subsidiaries that could not be recovered as impairment losses. Furthermore, it obstructed appropriate external audit procedures by failing to provide key information related to convertible bonds issued by its subsidiaries.

Previously, the Securities and Futures Commission of the Financial Services Commission had imposed a three-year designation for mandatory auditors and recommended dismissal or suspension of executives at both companies.

Additionally, on this date, the Financial Services Commission imposed fines of 208.5 million won on Hankyul LS and 41.6 million won on its former CEO and another executive. Myungga Dairy Products and its CEO and another executive were fined 313.9 million won and 31.9 million won, respectively.

This content was produced with the assistance of AI translation services.