Hynix fined $1.7mn
Hynix Semiconductor has been fined KRW2bn for accounting fraud. The company's former chief executive, Park Chong-Sup has been reported to prosecutors for further investigation.
Earlier in the week it was reported that South Korea's Supreme Public Prosecutor's office was investigating an accounting fraud of almost KRW2tr ($1.7bn) at Hynix that began in 1996 and ended in 1999. According to the reports, the Prosecutor's office was looking into whether funds were illegally diverted from the company's books to Hyundai affiliates.
Hynix was spun off from the Hyundai Group in 2001. Hynix Semiconductor put out a statement on its website confirming that they had been under investigation by the Korea Deposit Insurance Corporation from late 2003 to early 2004. The following is extracted from this statement:
"The investigation was to verify the cause of the company insolvency prior to the year when the company disaffiliated from the Hyundai Group, and to investigate the inappropriate use of funds by former management. Regardless of the determination, all controversial accounting items have been fully corrected and thus no such controversial accounting items now exist. We believe the result from this investigation will have no impact on current members of management. We will also keep making every endeavour to complete projects which we are strategically driving."
Only last week Business Weekly reported how Hynix had remarkably turned around from an apparent slow death in the last two years. The piece outlines the difficult history the company has had with many accusations of unfair subsidies. The company statement makes it clear that the investigation relates to previous management and intends to build on the positive foundation they now find themselves with.
