The Securities and Futures Commission Decides Sanctions for Dobu Mask's 'Accounting Standard Violations'

Decision to Impose Sanctions Including Fines and Appointment of Auditors

The Securities and Futures Commission under the Financial Services Commission announced on the 28th that it has resolved to impose sanctions, including the designation of an auditor, on Dobu Mask for preparing and disclosing financial statements in violation of accounting standards.

According to the Securities and Futures Commission, Dobu Mask, a textile product manufacturer, issued tax invoices as if it were engaged in the used mobile phone trading business from 2017 to 2019, falsely recording sales and cost of sales. After the business ended, it temporarily wrote off uncollected processed accounts receivable. The falsely recorded sales and cost of sales over the three years amounted to 27.409 billion KRW.

Additionally, it falsely recorded goodwill related to the used mobile phone trading business and temporarily impaired it after the business ended. Furthermore, although it received a tax notice from the National Tax Service, it did not record a provision for additional taxes in the financial statements.

Accordingly, the Securities and Futures Commission resolved to impose sanctions including fines, designation of an auditor for three years, recommendation for dismissal of the CEO and responsible executives, suspension of duties for six months, and referral to prosecution. The fines for Dobu Mask and its related parties will be finally decided by the Financial Services Commission in the future.

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