Only 3 out of 10 P2P Companies Submit 'Appropriate' Loan Bond Reports

Submitted Audit Reports for 79 Sites in First Survey
78 Sites Received 'Appropriate' Opinions... 105 Sites Did Not Respond

[Asia Economy Reporter Kim Hyo-jin] In the first comprehensive survey of loan receivables conducted by financial authorities to distinguish the quality of online-linked investment finance (P2P) companies, only about 3 out of 10 targeted companies submitted audit reports with an 'unqualified opinion.'

The Financial Services Commission and the Financial Supervisory Service announced on the 2nd that, after requesting 237 P2P companies to submit audit reports from accounting firms on their loan receivables, about 33% or 79 companies submitted audit reports by the deadline of the 26th of last month, among which 78 received unqualified opinions and 1 received a 'disclaimer of opinion.'

Among the companies that did not submit audit reports, 26 responded with 'no business performance,' 12 with 'submission difficult,' and 7 requested an 'extension of submission deadline.' Of the 113 companies that did not respond, 8 reported closure in July or August, and 105 did not respond, according to the financial authorities.

The financial authorities plan to conduct registration reviews under the Online Investment-Linked Finance Act (OnTu Act) for companies that submit audit reports with unqualified opinions and apply for registration.

With the enforcement of the OnTu Act on the 27th of last month, P2P companies must register their business with the financial authorities within one year. They must also meet requirements such as a minimum capital of 500 million KRW, preparation of regulatory measures for business activities including post-compensation for investor losses, and appointment of a compliance officer.

If these requirements are not met, registration will be denied or canceled. If registration is not completed within one year, the company will be converted to a traditional lending business rather than P2P, and will be prohibited from attracting investments from unspecified multiple investors.

On-site inspections to be conducted sequentially until August next year

The financial authorities have requested companies that did not submit or respond to the audit reports to resubmit by the 10th of this month.

For companies with 'qualified opinions,' 'disclaimer of opinion,' or final non-submission of audit reports, the authorities will verify whether they are operating and encourage them to return their P2P-linked lending business registration. If necessary, on-site inspections will be conducted, and actions such as cancellation of registration under the Lending Business Act will be taken.

The financial authorities initiated the investigation based on the judgment that investment risks have increased, as the average delinquency rate of P2P companies rose to 16% and illegal activities such as fraud by some companies were detected ahead of the enforcement of the OnTu Act.

On-site inspections following this comprehensive survey will be conducted sequentially until August next year.

This content was produced with the assistance of AI translation services.