The Securities and Futures Commission under South Korea’s Financial Services Commission approved sanctions against Hanju ART for overstating revenue, cost of sales and related accounts in its consolidated and separate financial statements from 2021 to 2023. The company recorded commercially insubstantial transactions using false tax invoices, resulting in misstatements of KRW 12.398 billion in 2021, KRW 9.985 billion in 2022 and KRW 3.472 billion in 2023. It also obstructed external audits by submitting forged accounting records and transaction evidence and presenting another company’s inventory as its own. Hanju ART will be subject to a designated auditor for three years, recommendations equivalent to dismissal for its former chief executive and two others, and criminal referrals covering the company, the former chief executive and three other individuals. The Financial Services Commission will determine administrative monetary penalties for the company and related individuals separately. Jeongjin Serim Accounting Firm and Seonjin Accounting Firm, which audited the company during 2021 and 2022-2023, respectively, must each make an additional 20% contribution to their damages compensation funds and are barred from auditing Hanju ART for two years. One certified public accountant at each firm received one-year restrictions on auditing Hanju ART and designated companies, as well as six hours of professional training.
South Korea's Securities and Futures Commission sanctions Hanju ART and two audit firms over accounting and audit failures
South Korea’s Securities and Futures Commission sanctioned Hanju ART for false accounting totaling KRW 25.855 billion from 2021 to 2023 and for obstructing external audits. The company faces three years of designated audits and criminal referrals, while monetary penalties remain subject to a final Financial Services Commission decision. Two audit firms and their responsible accountants also received audit restrictions and other measures for inadequate procedures.