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Regulators vow crackdown on unlisted firms’ accounts fraud
By Kim Yon-sePublished : April 16, 2013 - 20:00
Financial regulators pledged to enhance accounting oversight of non-listed big enterprises during its report to the National Policy Committee of the National Assembly on Tuesday.
The policy is a development from an earlier movement by the Finance Services Commission and the Financial Supervisory Service to take stern punitive measures against stock manipulators.
“Financial authorities will secure legal and systematic grounds to weed out fraudulent accounting practices,” said FSC chairman Shin Je-yoon.
FSS Gov. Choi Soo-hyun said the main supervision target will be big companies whose shares are not listed on the stock market ― widening the scope of inquiry from listed players.
Though the shares of the non-listed firms are not publicly traded on the bourse, past accounting fraud conducted by some of them sometimes undermined the nation’s accounting transparency by negatively affecting their listed affiliates, FSS officials said.
They said company chairmen and presidents may also be held accountable for rigging financial statements.
The FSS said it is also considering setting up a department in charge of special investigation into stock manipulation, which may coordinate with the prosecution.
His remarks mean that the regulator is seeking to rigidly reprimand both stock manipulators and conglomerate-based financial firms, which engage in irregular deals with their manufacturing affiliates.
In addition, FSC chief Shin vowed to revamp the governance structure of major financial groups.
Shin stressed that financial authorities are set to overhaul details in financial groups, such as Woori, KB, Shinhan and Hana, by “conducting a close inquiry into their management systems.”
For the full-fledged probe initiated by Shin, the FSC plans to establish a task force composed of experts from the financial market, universities and civic organizations.
Meanwhile, the National Tax Service, in its report to the National Assembly, said it will expand probes into offshore tax evasion this year.
By Kim Yon-se (kys@heraldcorp.com)
The policy is a development from an earlier movement by the Finance Services Commission and the Financial Supervisory Service to take stern punitive measures against stock manipulators.
“Financial authorities will secure legal and systematic grounds to weed out fraudulent accounting practices,” said FSC chairman Shin Je-yoon.
FSS Gov. Choi Soo-hyun said the main supervision target will be big companies whose shares are not listed on the stock market ― widening the scope of inquiry from listed players.
Though the shares of the non-listed firms are not publicly traded on the bourse, past accounting fraud conducted by some of them sometimes undermined the nation’s accounting transparency by negatively affecting their listed affiliates, FSS officials said.
They said company chairmen and presidents may also be held accountable for rigging financial statements.
The FSS said it is also considering setting up a department in charge of special investigation into stock manipulation, which may coordinate with the prosecution.
His remarks mean that the regulator is seeking to rigidly reprimand both stock manipulators and conglomerate-based financial firms, which engage in irregular deals with their manufacturing affiliates.
In addition, FSC chief Shin vowed to revamp the governance structure of major financial groups.
Shin stressed that financial authorities are set to overhaul details in financial groups, such as Woori, KB, Shinhan and Hana, by “conducting a close inquiry into their management systems.”
For the full-fledged probe initiated by Shin, the FSC plans to establish a task force composed of experts from the financial market, universities and civic organizations.
Meanwhile, the National Tax Service, in its report to the National Assembly, said it will expand probes into offshore tax evasion this year.
By Kim Yon-se (kys@heraldcorp.com)
