Former KOSDAQ Listed Company Executives Indicted for 60 Billion KRW Fraudulent Financial Statements...

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[Asia Economy Reporter Yoo Byung-don] Former executives of a KOSDAQ-listed company who gained over 60 billion KRW in illicit profits through fraudulent transactions have been brought to trial.

The Financial Investigation Division 1 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Moon Hyun-chul) announced on the 31st that three executives of company A, a former KOSDAQ-listed company, and its subsidiary company B have been indicted on charges including violation of the External Audit Act, violation of the Capital Markets Act, embezzlement in the course of business, and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes (breach of fiduciary duty).

According to the prosecution, the defendants inflated sales revenue on financial statements by approximately 30 billion KRW and gained a total profit of 63.4 billion KRW through paid-in capital increases and stock exchanges, while committing embezzlement and breach of trust amounting to about 2.6 billion KRW.

Among them, two individuals who served respectively as chairman and CEO of company A were indicted while in custody. Company A was listed on KOSDAQ in December 2016 but was delisted in July of last year.

Additionally, three individuals including the CEO of company C, who conspired with the CEO of company A during the acquisition process to make false disclosures, were also indicted for violating the Capital Markets Act.

They falsely disclosed and distributed press releases claiming to raise funds amounting to 200 billion KRW for new business ventures, and acquired illicit profits worth approximately 10.4 billion KRW by transferring company A’s management rights and shares to company C.

Furthermore, company C violated reporting obligations three times by falsely reporting the selling price of company A’s shares acquired through the takeover.

The prosecution stated, "We will strictly respond to fraudulent trading offenders, those who disrupt the order of the capital market, and those who obstruct judicial order by protecting them."

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