The financial authorities judged that the allegations of bad accounting by the three Celltrion companies were not intentionally falsified. However, it was judged that the accounting standards were violated and severe disciplinary action was decided, including a fine and the dismissal of the chief financial officer (CFO).
Celltrion and Celltrion Healthcare, which prepared and disclosed financial statements in violation of accounting standards, held the 7th extraordinary meeting of the Securities and Futures Commission (SFC) under the Financial Services Commission on the 11th.[091990]Celltrion Pharmaceuticals[068760]and decided to impose sanctions on the three companies, such as recommendation to dismiss executives in charge and designation of auditors.
As a result of supervision by the Financial Supervisory Service, it was revealed that the three Celltrion companies violated accounting standards, such as overestimating development costs, failing to reflect losses on valuation of inventories of subsidiaries, and omitting transactions with related parties in the notes.
Sales were excessively accounted for, or profits from the sale of domestic sales rights were incorrectly classified as sales.
It was also found that the audit procedure for these errors was neglected.
The SSC considered the violations of these accounting standards by the three Celltrion companies as ‘great negligence’ and judged that it was not intentional accounting fraud.
Accordingly, the prosecution’s complaints and notifications once morest the company or its executives and employees were not included in the measures as a result of the supervision.
Celltrion Group gave meaning to the fact that uncertainty in the financial market has been dispelled as the long-term supervision is over.
A Celltrion Group official said, “The part that was judged to be in violation of the accounting standards was a matter that occurred in the past, so it has no or limited impact on the current financial statements.” .
