The Audit Committee Files Criminal Complaints Against SFC and Newpride for 'Accounting Standards Violations'

[Asia Economy Reporter Park Jihwan] The Securities and Futures Commission under the Financial Services Commission announced on the 11th that at the 5th regular meeting, it resolved sanctions such as prosecution referral against SFC and New Pride Corporation for preparing and disclosing financial statements in violation of accounting standards.

According to the Securities and Futures Commission, SFC falsely recorded funds withdrawn without evidence by the former CEO from the end of 2016 to the third quarter of 2018 as advance payments and did not disclose related party transactions in the notes.

Additionally, when issuing anonymous, unsecured private convertible bonds, the company provided its deposits, treasury stocks, and priority rights to real estate as collateral to a savings bank but failed to disclose this in the notes.

The Securities and Futures Commission decided on sanctions against SFC and the former CEO, including prosecution referral, recommendation for dismissal of the CEO, a fine of 355.1 million KRW, and a two-year audit designation.

Furthermore, New Pride Corporation failed to disclose in the consolidated financial statement notes that it had lent 6 billion KRW of capital increase funds to its subsidiary.

The Securities and Futures Commission decided on prosecution referral against New Pride Corporation and three former executives, recommended dismissal of the responsible executive, and imposed fines. The amount of the fines will be determined later by the Financial Services Commission.

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