Hynix guilty of accounting fraud
Print storyPunishment looms
Posted in Channel, 20th September 2004 10:02 GMT
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Hynix is bracing itself for fines, and worse, after Korean regulators found it guilty of a $1.75bn accounting fraud.
The Financial Supervisory Service (FSS) says the memory chip overstated results for 1999. Hynix has also been found guilty of breaking accounting regulations in 2002-2003 when it tried to tidy up the mess.
The regulator found a 2,000 billion won ($1.75bn) black hole in Hynix accounts for 1999. Investigators are focusing on unauthorised intra-group trading, according to the Korean Times.
The FSS is considering fining the company as well as taking action against former company executives. It is holding a meeting with the Securities and Exchange Commission on Wednesday to decide what action to take against the firm and its former auditors Samil Accounting Group.
Samil Accounting Group is also under investigation and is likely to be banned from auditing other companies for some time. The Korean Times described the firm as "a doomed fish on the chopping board again". Hynix replaced the auditors earlier this year.
Hynix is stressing that problems are in the past: "All controversial accounting items have been fully corrected and reviewed through our former financial statements, thus such controversial accounting items no longer exist. Therefore, we believe the result from this investigation will have no impact on our current management." ®
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