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Regulators remove firms from market
South Korea’s Financial Services Commission has revoked the licenses and registrations of Shilla Asset Management and Zenith Investment Advisory after the firms took investors’ money while claiming to arrange subscriptions for initial public offerings.
At its 16th regular meeting, held on the 23rd, the commission also called for the dismissal of company executives and imposed financial penalties. An inspection by the Financial Supervisory Service found that the firms had failed to conduct the businesses for which they were authorized and had violated minimum capital requirements.
Shilla lost its authorization to operate public investment funds and its registration as a private fund manager. Zenith lost its registrations for investment advisory and discretionary investment management services.
Penalties for false disclosures
Shilla was fined 1.494 billion won for filing business reports that did not comply with accounting standards and contained inaccurate disclosures, as well as for failing to report major management developments. It received an additional 20 million won penalty for violating restrictions on extending credit to a controlling shareholder. A former executive was also targeted for dismissal over disclosure violations.
Zenith was fined 1.28 billion won for false disclosures in business reports. The commission also called for the dismissal of current and former executives.
Financial authorities said they would strictly monitor legal violations and impose firm penalties to protect market order and investor confidence in the asset management and investment advisory industries.
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