Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Kyobo gaining edge in fight against investors' alleged accounting fraud
Kyobo Life Insurance Chairman Shin Chang-jae speaks during a meeting with top management at its headquarters in Seoul on Jan. 10. Yonhap
By Lee Min-hyung
By Lee Min-hyung
Kyobo Life Insurance is gaining an edge in its months-long legal fight against alleged accounting fraud ― which the insurer has argued was a result of “manipulation” of reports by the firm's financial investors ― after the prosecution indicted an accountant from Nexia Samduk Accounting, Tuesday, for writing a “fake valuation report” on the insurer.
In November 2018, Affirma Capital, one of Kyobo's investors, signed a contract with Samduk while exercising its put option against Kyobo Life Insurance Chairman Shin Chang-jae after the insurer failed to go public on an agreed timeline with its investors.
Samduk is suspected of writing fake valuation reports at the request of the client. The prosecution is also known to have investigated whether the report by Samduk was based on a similar one written by Deloitte Anjin.
Prosecutors have already looked into some Deloitte Anjin accountants amid suspicions that they manipulated Kyobo's corporate value following a request from the client, Hong Kong-based Affinity Equity Partners.
Kyobo and Affinity have recently escalated their legal dispute over the issue after prosecutors indicted three Deloitte accountants for alleged collusion with Affinity to distort Kyobo's pre-initial public offering stock price.
The prosecution will face off with the Affinity and Anjin officials in court, June 2.
Beginning this year, Kyobo has stepped up criticism of the questionable ties between Affinity and Anjin, reaffirming its determination to spearhead efforts to end the practice of a client and an accounting firm manipulating a company's valuation.
“The Affinity-led consortium and Affirma Capital exercised the put option against Kyobo's largest shareholder by using fake reports written illegally,” an official from the Seoul-based insurer said.
“The credibility of the reports from the accounting firms is seriously tarnished after the prosecution indicted accountants involved in writing them,” the official said.