Financial Services Commission Imposes Penalties on Lead and ECS for Accounting Violations

[Asia Economy Reporter Park Jihwan] The Financial Services Commission announced on the 13th, during its 13th meeting, that it has decided to impose fines on company officials of two companies, including Lead, who prepared and disclosed financial statements in violation of accounting standards, in accordance with the "Act on External Audit of Stock Companies, etc."

Lead was previously subjected to a one-year restriction on securities issuance and a fine of 48 million KRW due to false recording of loans in 2017 and 2018, as well as false recording of machinery and equipment in 2018. Fines were imposed on Lead’s former executive director in charge of business execution amounting to 692.5 million KRW, the former CEO with 569.6 million KRW, the former responsible executive with 166.1 million KRW, and the former auditor with 13.5 million KRW, respectively.

The Financial Services Commission explained, "In the case of Lead, this is the first instance since the comprehensive revision of the External Audit Act where fines were imposed on the executive director in charge of business execution and the auditor for violations of accounting standards."

Additionally, Esys was fined for false recording of tangible assets, overstatement of sales and cost of sales from related party transactions. The company was fined 130 million KRW, and the CEO was fined 8.4 million KRW. Along with this, measures such as a two-year designation of the auditor, notification to the prosecution, and corrective orders were decided.

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