Financial Services Commission Fines Manho Steel & Wire and Executives 740 Million Won for Breach of Accounting Standards

Manho Steel & Wire and its executives have been fined a total of 740 million won for inflating their revenue by recognizing it before the proper time for revenue recognition.

On July 31, the Financial Services Commission announced that it has decided to impose a fine of 616.1 million won on Manho Steel & Wire for breaching accounting standards in the preparation and disclosure of its financial statements. In addition, the former CEO and the former executive in charge were fined 61.6 million won each.

According to the Financial Services Commission, between 2019 and 2022, Manho Steel & Wire was found to have overstated its revenue and cost of goods sold by recognizing revenue before the fulfillment of the shipping claim agreement conditions and prior to the transfer of control as stipulated in the trade terms.

Shinhan Accounting Corporation, which neglected its audit procedures for Manho Steel & Wire, was fined 114 million won.

The Financial Services Commission also imposed a fine of 3.803 billion won on Uiwang Baegun Project Financial Investment and 19.8 million won on its auditor, Daeju Accounting Corporation.

Uiwang Baegun Project Financial Investment, from 2019 to 2023, failed to properly recognize as assets and liabilities the amounts from the planned project costs that were recorded as cost of goods sold and the public contribution project expenses that should have been recognized as provisions. Additionally, it incorrectly listed the acquisition tax for multi-unit housing as inventory assets and overstated as well as double-counted some planned project costs.

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