The Securities and Futures Commission Sanctions Two Companies for Accounting Standards Violations

[Asia Economy Reporter Park Hyungsoo] The Securities and Futures Commission under the Financial Services Commission held a regular meeting on the 6th and decided to impose a fine of 415.9 million KRW and a two-year auditor designation sanction on Newbotek, a KOSDAQ-listed company, for violating accounting standards.

It was investigated that the former CEO of Newbotek embezzled company funds from 2014 to 2017 and manipulated accounting books, underreporting illegal receivables and shareholders' equity. Although the embezzled amount was recovered, the financial statements for each year were not revised.

The Securities and Futures Commission also decided to impose a four-month securities issuance restriction and a two-year auditor designation sanction on Wisdom FH, an unlisted company that violated accounting standards. Wisdom FH overstated equity-method investment stocks and failed to disclose that a related party provided a payment guarantee when borrowing money.

Earlier, the Korean Institute of Certified Public Accountants decided to impose audit work restrictions and other measures on the auditor of Wisdom FH for failing to detect the violation of accounting standards.

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