Securities and Futures Commission Takes Measures Against Fidelix Over 'Fictitious Sales,' Including 3-Year Auditor Designation

Suspected of Booking Fictitious Sales and Obstructing External Audits
Hyundai and With Accounting Corporations Also Sanctioned for Audit-Related Violations

On the 28th, the Securities and Futures Commission resolved to impose measures including designating an auditor for three years for Fidelix, a KOSDAQ-listed company, for preparing and disclosing financial statements in violation of accounting standards.

Fidelix is suspected of colluding with business partners to record fictitious sales and other items from 2018 to 2022. It is also suspected of obstructing an external audit, including by asking business partners to submit false responses to accounts receivable confirmation requests.

The commission imposed sanctions equivalent to recommendations for dismissal (removal from office) on two people, including the former CEO, and decided to refer the company and two people, including the former CEO, to investigative authorities. The former executive in charge was reported to investigative authorities. The Financial Services Commission will make the final decision on fines for the company and those involved.

Financial Services Commission. The Asia Business Daily DB.

That day, the commission also resolved to require Hyundai Accounting Corporation to make an additional contribution of 50% to the joint compensation fund and to restrict its audit work for the company for three years, citing violations of audit procedures. The Financial Services Commission will finalize the fine for the auditor.

The commission imposed measures on With Accounting Corporation for violating the rule restricting consecutive audits by the same engagement partner, including an additional contribution of 20% to the joint compensation fund for three companies and a two-year restriction on audit work.

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