[E-Daily Reporter Kwon Oh Seok ] The Financial Services Commission announced on the 15th that it held its 13th meeting and resolved to impose administrative fines of 20,474.1 million won and 8,428.1 million won, respectively, on Youngpoong(000670) and KoreaZinc(010130)for preparing and disclosing financial statements in violation of accounting standards. Additionally, auditors who neglected audit procedures during the external audit process were also hit with administrative fines.

In the case of Youngpoong, fines totaling 1.5115 billion won were imposed on four individuals, including the former CEO, and a fine of 1.068 billion won was imposed on the auditor, Daeju Accounting Firm. Fines totaling 763.2 million won were also imposed on two individuals, including the CEO of KoreaZinc.
According to the Financial Services Commission, Youngpoong failed to recognize provision liabilities for 2021–2022 regarding the remediation of contaminated soil in the area surrounding its smelter, despite having a legal obligation to do so. Furthermore, for 2023–2024, the company underestimated these liabilities by calculating them based on remediation methods not permitted by law. It was also confirmed that provisions related to the remediation of contaminated soil in forested areas surrounding the smelter, beneath the buildings of Plants 1 and 2, and groundwater were not adequately reflected. Furthermore, it was found that the company understated impairment losses during the asset impairment assessment process following the suspension of smelter operations from 2022 to 2024.
KoreaZinc was criticized for understating impairment losses by reporting valuation losses on financial instruments and investments in affiliates as lower than they actually were, despite a decline in their fair value and recoverable amount. The company was also found to have failed to fully recognize impairment losses, such as those related to goodwill of overseas subsidiaries, and to have obstructed the auditors by delaying or restricting the provision of materials during the external audit process.
Previously, the Securities and Futures Commission of the Financial Services Commission had resolved to impose a three-year audit firm designation measure on the two companies, along with recommendations to dismiss relevant executives and suspend them from their duties.
In addition, the Financial Services Commission imposed a fine of 208.5 million won on Han-Gyeol SLCORPORATION for falsely recording inventory assets and underreporting valuation losses, and fines totaling 41.6 million won on two individuals, including the former CEO. Myeongga Dairy was fined 313.9 million won, and two individuals, including the CEO, were each fined 31.9 million won.