Yeungpo issues rebuttal statement regarding the Financial Services Commission's Securities and Futures Committee decision related to Korea Zinc

*This content was translated by AI.

On the 17th, Yeungpo released a rebuttal statement in response to Korea Zinc's statement concerning the Financial Services Commission's Securities and Futures Committee's decision on accounting violations by Yeungpo.

In its statement, Yeungpo expressed "strong regret toward Korea Zinc's internal director Choi Yun-beom's side, which is strategically exploiting the Securities and Futures Committee's decision and launching a counterattack," and stated that "Director Choi's side must resolve the suspicions of accounting fraud and management misconduct on its own."

Yeungpo's side interpreted the Securities and Futures Committee's decision on the 10th to impose severe sanctions on Korea Zinc for violating accounting treatment standards as "the financial authorities officially confirming that there were serious illegalities and moral hazards in Korea Zinc's investment decision-making, internal controls, and audit systems as a whole."

Yeungpo escalated the intensity of its attack by citing the special tax investigation conducted by the National Tax Service's Investigation Bureau 4. It highlighted that the National Tax Service detected circumstances of overseas outflow of acquisition funds for Ignio and applied suspicions of illegal foreign currency outflow amounting to 400 billion won. Additionally, there are suspicions that 110 billion won in corporate funds were improperly transferred to companies related to Director Choi's family through private equity funds.

Regarding these suspicions, Yeungpo called for the Korea Zinc Board of Directors' Audit Committee to fulfill its role. It explained that as an independent supervisory body responsible for monitoring management's execution of duties, it must immediately launch an investigation into the fund execution structure and whether shareholder interests were damaged.

On the other hand, Yeungpo clearly stated that the accounting treatment related to Yeungpo's provision liabilities pointed out by the Financial Supervisory Service is fundamentally a different matter. This is based on the logic that it is an "area of estimation" where opinions may even differ among experts during the application of Korean Adopted International Financial Reporting Standards (K-IFRS). It is not possible to equate the issue of accounting estimation, which allows for various interpretations, with intentional misconduct.

Yeungpo's side stated that it has reasonably calculated the scale of provision liabilities in accordance with relevant laws and regulations and has undergone verification by external experts. It explained that the issue stems from a difference of opinion with the authorities and is clearly distinct from Korea Zinc's intentional accounting fraud or obstruction of external audits.

A Yeungpo official concluded the statement by saying, "We will continue to do our best to ensure transparent accounting treatment, protect shareholder value, and continue responsible management."

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*This content was translated by AI.