Financial Services Commission Imposes 2.5 Billion KRW Fine on Seegene for Accounting Standards Violations

[Asia Economy Reporter Park Ji-hwan] Financial authorities have decided to impose a fine on Seegene for violating accounting standards.

The Financial Services Commission announced on the 8th, after holding a regular meeting, that it imposed a fine of 2.5145 billion KRW on Seegene, a KOSDAQ-listed company, for violating accounting treatment standards.

A fine of 118.4 million KRW was also imposed on the CEO and the responsible executive respectively. Measures including recommendations for dismissal of related executives, a six-month suspension of duties, a three-year designation of auditors, and recommendations for internal control improvements were also taken.

Seegene arbitrarily shipped excessive quantities of products exceeding actual order volumes to dealerships from 2011 to 2019 and recognized all of these as sales, resulting in overstatement or understatement of sales revenue, cost of sales, and related assets.

It was also confirmed that development expenses were overstated from 2011 to 2017. It was pointed out that expenses incurred during research on diagnostic reagents and others were recorded as development costs despite not meeting asset recognition requirements such as technical feasibility.

Seegene’s auditor, Woo Deok Accounting Corporation, was also subjected to measures including a fine of 135 million KRW, an additional 50% contribution to the joint compensation fund, and a three-year restriction on audit duties.

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