The Securities and Futures Commission Imposes Fines and Auditor Designation on Gyeongnam Bank for Accounting Violations

On the 22nd, the Securities and Futures Commission held its 2nd meeting and decided to impose a one-year audit designation on Gyeongnam Bank and a fine of 20 million won on its CEO.

According to the Securities and Futures Commission, Gyeongnam Bank failed to properly reflect the embezzlement of funds by an employee in its financial statements in 2021, resulting in an overstatement of its equity capital by approximately 100 billion won. Additionally, the bank used the 2021 financial statements prepared in violation of accounting standards in securities registration statements and other documents.

The commission also decided to impose fines, a three-year audit designation, and recommend the dismissal of former executives on Ark Solutions (formerly Prostemics), a KOSDAQ-listed company, and reported the company and two former CEOs to the prosecution.

Ark Solutions falsely recorded approximately 1.6 billion won in product sales and cost of sales in 2020. To conceal this fact, the company temporarily borrowed inventory assets from suppliers in accordance with the inventory inspection schedule, thereby obstructing the auditor's normal external audit. The imposition of fines on the company and its related parties will be finalized by the Financial Services Commission.

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