Sky 72 "Golf Course Free Transfer" Audit Report... Violation of External Audit Act

Sky72 Announces "Golf Course Free Transfer" Every Year for 15 Years Since Opening
Contradicts Claims of Compensation for Golf Course Facilities
False Audit Report, Obstruction of Auditor's Duties
Imprisonment up to 3 Years or Fine up to 30 Million KRW

[Asia Economy Reporter Ji Yeon-jin] Sky72, which is in dispute with Incheon International Airport Corporation over compensation for golf course facilities, has revealed that its official accounting documents over the past 15 years since its opening stated that "all golf course facilities will be transferred to the corporation free of charge or dismantled." This directly contradicts Sky72's continued operation of the golf course and demands for facility compensation even after the land lease contract expired on December 31 last year, potentially subjecting them to penalties for false accounting disclosures.

According to the Financial Supervisory Service's electronic disclosure system on the 15th, Sky72 wrote in its annual audit reports submitted every year since its opening in 2005 until last year that "the golf course facilities completed in 2005 will be managed and operated until 2020, after which all golf course facilities will be transferred free of charge or dismantled to Incheon International Airport Corporation."

In particular, the audit report submitted last year included an auditor’s opinion from Seo Woo Accounting Firm emphasizing the need to pay attention to the audit report notes that stated "the land use contract period with Incheon International Airport Corporation ends on December 31, 2020," highlighting the "possibility of significant business discontinuation."

The audit report also stated, "During the land use period (from the project implementer designation date until December 31, 2020), we hold exclusive rights to own, manage, operate, and profit from all facilities within the project area," and "facilities other than equipment will be transferred free of charge to the corporation or the state or dismantled after the land use period expires. The company will bear the dismantling costs." The corporation estimated the dismantling cost at 15.93 billion KRW as a performance bond for the service. However, it was noted, "Considering Incheon International Airport’s mid- to long-term plans, the likelihood of dismantling in 2020 is low, so this was not reflected in the financial statements." Since the possibility of constructing the originally planned fifth runway is low, it appears they considered free transfer rather than dismantling.

Kim Kyung-wook, President of Incheon International Airport Corporation, filed a criminal complaint with the Incheon Police Agency on the 1st against Kim Young-jae, CEO of Sky72, for obstruction of business at the entrance to the Sea Course of Sky72 Golf Course in Yeongjongdo, Incheon, and announced a statement declaring the suspension of water supply to Sky72. / Yeongjongdo = Photo by Kim Hyun-min kimhyun81@

Earlier, the corporation selected KMH Shilla Leisure as the new operator ahead of Sky72’s lease contract expiration last year. However, Sky72 has continued operations, claiming ownership of the facilities even after the contract expired.

Audit reports are disclosed annually to ensure sound corporate management and protect stakeholders such as shareholders, creditors, and investors. Therefore, the "Act on External Audit of Stock Companies (External Audit Act)" imposes strict penalties for falsifying accounting information such as audit reports. Article 42 of this law stipulates that "anyone who presents false data to an auditor or a certified public accountant belonging to the auditor, or obstructs the auditor’s normal accounting audit by false or other fraudulent means" may face imprisonment of up to three years or a fine of up to 30 million KRW.

Additionally, Article 31, Paragraph 2 of the same law states that "if an auditor omits or falsifies important matters in the audit report, causing damage to third parties who relied on it, the auditor is liable to compensate those third parties." Paragraph 4 further stipulates that "if the company is responsible, the auditor and the company’s directors and auditors are jointly liable for damages."

A Sky72 official stated, "The contract period and the free transfer or dismantling details were written for accounting depreciation purposes." The 2020 audit report submitted by Sky72 the day before changed the wording to say, "Although the land use period with Incheon International Airport Corporation is until December 31, 2020, we believe there are rights to request renewal of the implementation agreement, compensation for improvements, and purchase of surface structures, so we are continuing operations."

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