South Korea’s top financial regulator, the Financial Services Commission (FSC), has announced it will fine Doosan Enerbility Co. a record-breaking 16.1 billion won ($12 million) for inappropriate bookkeeping practices. The penalty comes after an investigation by the Financial Supervisory Service (FSS) revealed that the company failed to disclose massive losses from an Indian power plant project in its financial statements between 2017 and 2020. Doosan Enerbility, formerly known as Doosan Heavy Industries & Construction Co., was suspected of trying to hide nearly 300 billion won in losses from a 2.8 trillion won project to build thermal power plants in India.
This fine marks the highest-ever penalty for accounting irregularities in South Korea, surpassing the previous record set in 2022. Financial authorities in the country have been cracking down on intentional accounting fraud, implementing stricter rules since 2018 following a major scandal at Daewoo Shipbuilding & Marine Engineering Co. The FSC’s decision reflects a commitment to holding companies accountable for their financial reporting practices.
Doosan Enerbility has yet to respond to the fine, and it remains to be seen how the company will address the situation. The implications of this record penalty will likely impact not only the company itself but also the broader business community in South Korea. As the FSC continues to prioritize transparency and integrity in financial reporting, companies will need to ensure they are in compliance with regulations to avoid facing similar consequences.
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