The Financial Services Commission held its 6th meeting on the 2nd and imposed a penalty surcharge of 720 million won on KOSDAQ-listed IREM for violating accounting standards in preparing and disclosing its financial statements. The total amount of penalty surcharge, including measures from the Securities and Futures Commission, amounts to 950 million won.
The Securities and Futures Commission and the Financial Services Commission also mandated a three-year auditor designation for the company and corrective measures, along with a penalty surcharge of 36 million won. A total penalty surcharge of 300 million won was decided for five individuals, including the former CEO. Restrictions on audit services were decided for Shinhan Accounting Corporation and one certified public accountant responsible for the IREM audit.
IREM overstated the value of investment shares from affiliated companies in its consolidated financial statements for 2019-2020, resulting in an overstatement of current net income on the financial statements. At the time, an affiliated company holding IREM's shares had recorded operating losses for several years; however, the company utilized a business plan suggesting that future sales would significantly increase without any reasonable basis, leading to an understatement of impairment losses.
The Securities and Futures Commission and the Financial Services Commission decided on a penalty surcharge of 210 million won, a three-year auditor designation, recommendations for the dismissal of the CEO and responsible executives, a six-month suspension of duty, and prosecution against KOSDAQ-listed Bonne, which overstated inventory assets and understated and overstated damages-related expenses.
A penalty surcharge of 76.49 million won was imposed on KOSDAQ-listed Wooyang HC for understating lease-related assets and liabilities, while 7.6 million won was imposed on the CEO personally.