STX: Administrative Court Suspends Effect of SFC Measures

Suspension of Effectiveness for CEO Dismissal Recommendation
and Accounting Book Adjustments

General trading company STX announced on August 28 that the Seoul Administrative Court had issued a decision to suspend the effect of the recommendations made last month by the Securities and Futures Commission (SFC), including the recommendation to dismiss the CEO for violations of accounting standards.

On August 27, the Seoul Administrative Court accepted STX's request for a provisional injunction to suspend the effect of the SFC's measures. As a result, the recommendation to dismiss CEO Sangjun Park and suspend him from duty for six months, as well as the requirement to reflect the identified issues in the accounting books and financial statements, will be suspended until 30 days after the ruling in the main administrative lawsuit.

Previously, the SFC determined that STX, a general trading company, and STX Green Logistics, a shipping and logistics company, failed to recognize provisions for overseas lawsuits in their financial statements or disclose contingent liabilities in the notes. The SFC imposed fines, designated auditors for three years, and recommended the dismissal and six-month suspension of the CEOs.

STX explained that the court made this decision because dismissing CEO Park could seriously disrupt the company's defense business, which is a national strategic industry. A company representative stated, "With this decision, STX's major defense projects will proceed as scheduled, and the defense export contract to Peru, which CEO Park has been pursuing together with domestic defense companies, can also continue without disruption."

The court also suspended the effect of the SFC's measure requiring STX to reflect the identified accounting standard violations in its financial statements.

Separately from the acceptance of this provisional injunction, STX is proceeding with an administrative lawsuit to overturn the SFC's measures and is also in the process of filing an objection with the SFC. As the Financial Services Commission has not yet held a review on the fines, the court's decision is expected to influence the subsequent procedures and the final ruling.

An STX representative stated, "Through the main lawsuit, we will correct the SFC's unfair measures and focus on restoring corporate trust and carrying out national strategic projects."

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