'Dexter Studio Fined KRW 950 Million for Violating Accounting Standards'

The Financial Services Commission has imposed a fine of around KRW 900 million on Dexter Studio for violating accounting standards.

On September 9, during its 15th regular meeting, the Financial Services Commission announced its decision to impose a total fine of KRW 946.3 million on Dexter Studio for preparing and disclosing financial statements in violation of accounting standards. In addition, two individuals, including the former CEO, were each fined KRW 72.7 million and KRW 94.6 million, amounting to a combined fine of KRW 167.3 million.

Dexter Studio was found to have manipulated the progress of projects whose production was cancelled or whose contract amounts were falsely inflated to overstate revenue, thereby inflating net profit and equity capital. The company also failed to account for derivative products wherein the amount to be paid to investors fluctuates based on the company’s share price as the underlying asset, resulting in an overstatement of net profit and equity capital. Furthermore, the company hampered a proper external audit by submitting falsified key financial statements to its auditor.

In addition, the Financial Services Commission decided to require Daejoo Accounting Corporation, which audited Dexter Studio, to contribute an additional 20% to the joint compensation fund and to prohibit the firm from auditing Dexter Studio for two years.

Previously, the Securities and Futures Commission had already resolved to designate an auditor for Dexter Studio, recommend dismissals of former CEOs and other individuals involved, and file a criminal complaint with the prosecution.

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