To Bolster Accounting Oversight
Samyang Foods announced on Oct. 26 that it will set up an audit committee composed entirely of outsiders to ensure independence and strengthen the supervision of the company's operations and accounting.
The plan is a response to an embezzlement case involving the company’s founder family.
"It is a little late, but we will take measures to boost management transparency," said Kim Jung-soo, president of Samyang Foods in an e-mail to all executives and employees.
Kim is the wife of Jeon In-jang, a former chairman of Samyang Foods. She was convicted of embezzlement in March and resigned as president but returned to the office on Oct. 8.
Kim explained that she will appoint the same number of outside directors as inside directors so that checks and balances are built into the management of the company. This means that three out of the six board seats will be filled with outside directors. In particular, the CEO will be separated from the chairmanship of the board so that the board can operate independently.
The company will also set up an audit committee within the board of directors and strictly comply with legal qualifications. The audit committee will consist of the three outside directors. According to the Commercial Act, one of the auditors must be an accounting expert, and persons related to the president of a company cannot become an auditor.
Kim was previously sentenced to two years in prison with a three-year stay of execution on charges of embezzling 4.9 billion won from the company in January. Former chairman Jun In-jang was also sentenced to three years in prison on the same charge and is currently behind bars.