Kyobo Life Insurance, a major South Korean life insurer, said Friday that it has requested a US nonprofit watchdog to punish three accountants of Deloitte Anjin for colluding to inflate the prices of a put option exercised by one of its investors.

Kyobo Life Insurance filed the petition with the Public Company Accounting Oversight Board, asking for their "strong punishment," according to the company. The board is a nonprofit watchdog established by US Congress to oversee the audits of public companies as part of efforts to protect investors and further the public interest.

The request came as Kyobo Life has been mired in a protracted legal battle with Affinity Equity Partners over a put option that the Hong Kong-based private equity firm exercised on 6 million shares of the insurer.

In October 2018, Affinity Equity Partners exercised the put option at a strike price of 409,000 won ($339) per share after Kyobo Life failed to deliver on its promise to conduct an initial public offering by September 2015.

Kyobo Life refused to buy those shares, saying the price was too high, and lodged a complaint with the International Council for Commercial Arbitration. In September, the ICC rejected Affinity Equity Partners' request.

Deloitte Anjin was in charge of determining the fair market value of the put option.

Early last year, prosecutors indicted the three officials of the accounting firm and two others of Affinity Equity on charges of colluding to inflate the prices. A court ruling is expected to be made on Feb. 10.

The ongoing legal controversy over the put option is apparently causing a delay in Kyobo Life's push for an initial public offering (IPO).

Last month, Kyobo Life applied for preliminary approval by the Korea Exchange (KRX), the country's main bourse operator, for its IPO plan and picked NH Investment and Securities Co. as the lead manager for stock listing. The KRX was supposed to decide on the matter in mid-January.

A Kyobo Life official said that the bourse operator's decision will likely be made after the court ruling set for February.

The insurer aims to complete an IPO within the first half of this year to diversify its funding sources in preparation for the introduction of a new accounting rule for insurance products in 2023. (Yonhap)