Financial Supervisory Service (Yonhap)
South Korea’s financial watchdog is likely to slap sanctions on the tobacco giant KT&G over accounting fraud allegations, according to officials Wednesday.
The Financial Supervisory Service sent a preliminary notice to KT&G last month, concluding that the firm violated financial reporting standards by reporting its Indonesian affiliate Trisakti in its consolidated financial statements even though it exerts no actual influence.
The notice, which recommends prosecutorial probe and dismissal of the executive member in charge, came after two-year long oversight deliberation since November 2017, when allegations were raised over KT&G’s due diligence process regarding its acquisition of Indonesia’s sixth-largest tobacco maker Trisakti.
KT&G, for its part, denied allegations and said it would clarify its position to authorities.
“The matter appears to be resolved sufficiently if the company clarifies allegations by proving (its claims) in follow-up procedures,” the company said.
By Choi Jae-hee (firstname.lastname@example.org