2026.10.22. The Fair Economy — Haitai has been fined 937.8 million won by the Financial Services Commission (FSC) for preparing and disclosing financial statements in violation of accounting standards, while four company officials, including the CEO, were fined a combined 362.1 million won.
The FSC said on the 21st that it had decided at its 18th meeting to impose fines on Haitai and its officials under the Act on External Audit of Stock Companies.
Haitai was found to have overstated revenue and cost of sales by a total of about 53 billion won in its consolidated and separate financial statements from 2016 to 2019. It used methods such as issuing false tax invoices or omitting accounting for sales discounts and sales incentives.
It was also pointed out that Haitai used financial statements for the 16th to 18th fiscal years that violated accounting standards in its securities registration statements, presented false transaction evidence to auditors, and asked business partners to falsely respond to confirmation requests, obstructing external audits.
The fines amount to 937.8 million won for the company, 93.7 million won each for the CEO, former auditor, and head of the finance department, and 81 million won for the former executive in charge of sales.
Haitai had previously been subject to measures at the 16th meeting of the Securities and Futures Commission on September 16, including designation of an auditor for three years, recommendation to dismiss the head of the finance department, six months of job suspension, recommendation to dismiss the former auditor, and notification of the financial department head and former auditor to investigative authorities. The FSC's fine is a follow-up measure.
The sanction comes after the FSC strengthened penalties for accounting fraud in May through amendments to the Capital Markets Act and the enforcement decree of the External Audit Act. The revised decree imposes fines with an additional 20-30% each year based on the number of violation years and the motive of the violation, such as intentional or gross negligence, and newly establishes grounds for imposing fines on 'business execution instructors' who are not registered executives but effectively led the accounting fraud.
Haitai's fine is comparable to recent cases of accounting violations sanctioned by financial authorities. In July, the FSC imposed fines of 20.474 billion won, the largest ever, on Young poong, and 8.428 billion won on Korea Zinc. Young poong was sanctioned for understating provisions for environmental remediation liabilities, and Korea Zinc for understating valuation losses and impairment losses.
Haitai is known to be considering filing an administrative lawsuit against the fine. The company is said to be reviewing legal action, claiming that "there was no intention in the violation of accounting standards."
0 Comments
No comments yet.