Financial Services Commission imposes fines on SL and one other for 'false statements in business reports'

[Asia Economy Reporter Eunmo Koo] On the 24th, the Financial Services Commission decided at its regular meeting to impose fines of 1.7847 billion KRW and 2 billion KRW respectively on SL and New Pride Corporation for preparing and disclosing financial statements in violation of accounting standards.

Automotive parts manufacturer SL understated the operating profit of its subsidiaries due to concerns over pressure to reduce unit prices from customers during 2016-2017, and in 2018, when operating profit sharply declined due to rising material costs, it overstated the operating profit. SL received measures including a fine, a three-year audit designation, a recommendation to dismiss the responsible executive, notification to the prosecution, and corrective action requests.

Tire distribution company New Pride Corporation was found to have failed to disclose in its consolidated financial statements the 6 billion KRW capital increase funds provided by Mr. A, the company's largest shareholder since February 2018, which were lent through the company's subsidiary. It was also revealed that the company overstated operating profit by recording company expenses in the subsidiary. New Pride Corporation also received fines along with recommendations to dismiss the responsible executive, prosecution referral, and corrective action requests.

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