The Korea Securities and Futures Commission Restricts Securities Issuance of MBI for Inflating Earnings Ahead of Listing

The Securities and Futures Commission under the Financial Services Commission announced on the 5th that it has decided to restrict MBI from issuing securities for 10 months due to violations of accounting standards in the preparation and disclosure of financial statements, and to notify the prosecution in relation to this matter.

According to the Securities and Futures Commission's findings, MBI inflated its performance and, in collusion with delivery agencies, issued false tax invoices, thereby overstating sales and cost of sales to facilitate an easier listing review when pursuing a KOSDAQ listing.

Additionally, MBI did not disclose in the notes the difference between the transaction price and fair value related to the issuance of redeemable convertible preferred shares in 2020. Since the company's redeemable convertible preferred shares are not valued using active market disclosure prices or observable market data, the difference between the transaction price and fair value must be disclosed in the notes when measured at the transaction price upon initial recognition.

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