![[단독] Yesco’s Suspicious Investment… Financial Supervisory Service begins accounting supervision](https://file.mk.co.kr/meet/neds/2021/02/image_readtop_2021_140091_16129439114538203.jpg "[단독] Yesco’s Suspicious Investment… Financial Supervisory Service begins accounting supervision")
According to the financial investment industry on the 9th, Yesco Holdings followed suit from 2016 to 2017, such as’A Ernest B’, a Singaporean investment company whose major shareholders were Gu Bon-woong Formation Group, a third-year-old LS family member, and’Eva Automation’, an American voice recognition startup After investing, it lost 56 billion won belatedly, and the Financial Supervisory Service is confirming the process. At the time, Yesco Holdings was led by Chairman Koo Ja-cheol, the uncle of CEO Koo Bon-woong. The father of CEO Koo Bon-woong, Chairman Koo Ja-hong, LS Nikko Copper, is the father of Chairman Koo Ja-cheol.
CEO Koo Bon-woong founded Formation 8 in 2012 and ran the road to success in the early stages, but he made a bankruptcy procedure after investing in equity investments in Arnest B and Eva Automation.
Yesco Holdings, which started joint investment with CEO Koo Bon-woong, reduced the capital investment by KRW 56 billion in the form of rewriting the 2018 financial statements at the end of 2019. This is because Yesco Holdings’ external audit process found a problem with valuation of financial assets at fair value through profit or loss. After revising this, Yesco Holdings received a `proper` opinion in the audit report. In this process, the FSS is looking into whether Yesco Holdings properly evaluated the value of investment assets and reflected them in the accounting books.
In January of this year, Yesco Holdings changed its CEO from Chairman Ja-cheol Koo to President Koo Bon-hyuk, the eldest son of LS Nikko Copper Smelting Chairman Koo Ja-myung. Chairman Koo Ja-hong is reportedly disposing of LS Group’s stake in order to virtually compensate for the investment loss of his eldest son, CEO Koo Bon-woong. Chairman Koo Jahong recently sold 700,000 shares of LS, a holding company, for 50 billion won and 210,000 won for Yesco Holdings for 7 billion won.
An LS Group official said, “The company rewrites its financial statements to reduce investment losses and received appropriate opinions from external audits.”
[강계만 기자]
Yesco Holdings, LS family loses money after investing in related companies
Financial Supervisory Service begins accounting supervision
Overseas venture invested by CEO Koo Bon-woong
Yesco Holdings also invested in 2016
Accounting behind the external audit point
Revised 2018 financial statements in 2019
Last year, when sales and operating profits did not change
Reflecting tens of billions of financial investment losses
Key to the fairness of equity valuation
Yesco Holdings fell into a’deficit swamp’ as it made massive losses in a short period of time after putting a stake in an investment company of Formation Group CEO Koo Bon-woong, the eldest son of the LS family.
Yesco Holdings invested 16 billion won in 2016 in Eva Automation, an American voice recognition startup, which CEO Bon-woong Koo initially invested, and 20 billion won in 2017 in Singapore delivery startup A Ernst B, and amortized a total of 560 in 2018 financial statements. I lost KRW billion. In particular, as such accounting book corrections were made at the end of 2019, net profit in the range of tens of billions of won in 2018 suddenly turned into a net loss of 36 billion won. In this process, the Financial Supervisory Service is reported to have initiated accounting supervision to ensure that the value of the investment stake was properly evaluated. Yesco Holdings corrected the investment loss at the end of 2019, but it became difficult to avoid an investigation by the financial authorities.
Yesco Holdings recorded a surplus of 20 billion won in 2019, but turned back to a net loss of 51.4 billion won last year. This deterioration in earnings appears to have reflected the loss of fair value valuation of financial products following the deterioration of subsidiaries’ profits and losses due to Corona 19. This is a reflection of losses related to investment shares that are not related to operating performance.
Yesco Holdings, a subsidiary located outside the fence of the LS Group’s holding company, was able to generate stable sales and operating profits with Yesco, a city gas company. However, due to a series of investment failures in recent years, a large-scale net loss was recorded and an emergency occurred.
Yesco Holdings explained in its business report, “At the end of 2019, the auditor found an important vulnerability, such as not properly recording important errors related to financial assets at fair value through profit or loss in our internal accounting management system.” In addition, Yesco Holdings said, “An error in the evaluation of financial products was found in the current year, and the previous year’s financial statements, which were compared and displayed, were retroactively rewritten to reflect these amendments.” As a result, the portion that was completely lost was about KRW 56 billion, including KRW 40.7 billion in fair value evaluation, KRW 11.4 billion in damage to tangible assets, and KRW 14.1 billion in goodwill damage.
In response, LS said, “As companies that Yesco Holdings invested in became difficult, we revised the 2018 financial statements at the end of 2019 to reduce the investment principal. We received appropriate opinions from external auditors in both fiscal years.” . He added, “Yesco Holdings invested in the stake after sufficient review, believing in the possibility of success of CEO Koo Bon-woong, who has made a lot of investment in the past.”
In the process of managing the company, Ja-cheol Koo, chairman of Yesco Holdings, unfortunately took responsibility for the failure of jointly investing in the investment company of his nephew, CEO Koo Bon-woong. Chairman Koo expressed his resignation at the end of last year and was replaced by CEO Koo Bonhyuk, the eldest son of the late LS Nikko Copper Chairman Koo Ja-myung.
LS Nikko Copper Chairman Koo Ja-hong, who was the first chairman of the LS Group, seems to be making every effort to save the eldest son, CEO Koo Bon-woong. CEO Koo Bon-woong, who was attracting attention as a successful venture business, is reported to be staying abroad to deal with various lawsuits following a recent investment failure.
Chairman Koo Ja-hong began to dispose of his stake in LS affiliates. Despite the symbolism of being the eldest son of the LS family, it can be interpreted as a measure to actually compensate for losses caused by CEO Koo Bon-woong by rearranging the holdings. On the 3rd, Chairman Koo sold 21,5911 shares (3.6%) of Yesco Holdings, 2,2897 shares (0.38%) of CEO Koo Bon-woong, and 8,000 shares (0.13%) of Goo Goo’s eldest daughter. . The disposal amount is around 8 billion won. With this, the family of Chairman Jahong Koo organized the relationship with Yesco Holdings. Earlier, at the end of last year, Chairman Koo Ja-hong sold 700,000 shares of LS, a holding company, for 50 billion won. Accordingly, it is observed that Chairman Koo Ja-hong and CEO Koo Bon-woong will distance themselves from LS Group management in the future.
A business official said, “I know that Chairman Koo Ja-hong is selling shares to repay stock-backed loans while the stock market is showing good performance.” LS Group’s generational change is also accelerating thanks to Chairman Ja-Hong Koo’s reorganization of equity relations and management performance of affiliates and affiliates. The largest shareholder of Yesco Holdings, which has turned to the red this time, is LS Mtron Chairman Ja-eun Koo, who has been “appointed” as the next chairman of LS Group. In the business world, it is predicted that after the inauguration of LS Group in 2003, Chairman Koo Ja-eun inherited the cousin management tradition from former Chairman Ja-Hong Koo and current Chairman Ja-yeol Koo, and will rise to the top three by the end of this year.
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