The Financial Services Commission imposed a penalty of 7.8 billion won for the Korean Aerospace Industry (KAI) fraudulent accounting case. The Samil Accounting Firm, who was in charge of the audit, also imposed a penalty.
The Financial Services Commission announced on the 17th that it has decided and confirmed measures such as imposing a penalty of 7889 billion won on KAI for preparing and disclosing financial statements in violation of accounting standards and designating an auditor for two years. It is the largest in 2018 after the financial authorities imposed a penalty of 8 billion won to Samsung Biologics for deliberate fraudulent accounting.
The Financial Services Commission also imposed a fine of 24 million won on the former CEO of KAI. Measures such as recommendation for dismissal of the CEO, officer in charge, and audit committee were replaced by notification of violations of the retirees due to the resignation of the target person.
At the time, sanctions were imposed on the Samil Accounting Firm, which was in charge of the audit, such as a penalty of 396 million won and a two-year limit for auditing KAI. It was decided to limit the auditing of listed companies for one year for the three accountants in the company.
The financial authorities determined that KAI overestimated sales and related assets worth hundreds of billions of dollars in 2011-2017. He pointed out that intangible assets were overestimated by dividing and amortizing development costs that are not compensated by the Defense Acquisition Program Administration for intangible assets.
The suspicion of KAI’s fraudulent accounting raised in 2017 was raised when the prosecution began investigating corruption in the defense industry. At the time, the Seoul Central District Prosecutors’ Office announced that KAI overestimated 5358 billion won in sales and 46.5 billion won in net profit through material delivery manipulation and cost transfer between 2013 and 2017. Then the Financial Supervisory Service came and supervised KAI for more than a year.
Former KAI CEO Ha Sung-yong, who was handed over to the trial for 10 various corruption charges including fraudulent accounting, was acquitted in connection with charges of fraudulent accounting at the first trial, but was convicted of embezzlement and obstruction in some work, and was executed after 1 year and 6 months in prison. I was sentenced to two years of probation.
Reporter Lee Hyun-il [email protected]
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