 |
Photo = Financial Supervisory Service |
[Alpha Biz= Paul Lee] Live streaming platform company SOOP is currently under an accounting audit by the Financial Supervisory Service (FSS) due to allegations of accounting fraud, according to reports from the IT industry on Tuesday.
The FSS recently launched an investigation into SOOP (formerly known as AfreecaTV) over suspicions that the company engaged in fraudulent accounting practices amounting to hundreds of billions of won.
SOOP operates its advertising business by recruiting streamers from its platform to deliver advertisements for advertisers. Approximately 90% of advertising fees are paid to streamers who create and execute the ads, while SOOP takes a commission as an intermediary.
The FSS suspects that SOOP inflated its revenue figures by including payments made to streamers as part of its own revenue when accounting for its gaming content advertisement business. This issue had been flagged in a previous 2021 financial audit, though SOOP reportedly revised some of its contracts since then.
SOOP acknowledged the ongoing FSS investigation, stating, “We are cooperating fully with the inquiry. The contract modifications have been continuously updated since 2019 to better align with actual transactions, not for any specific purpose.”
The revenue from SOOP’s gaming content advertisement business under review by the FSS is as follows:
2020: ~2 billion won
2021: ~12 billion won
2022: ~27 billion won
2023: ~4 billion won
2024 (Q1–Q3): ~11 billion won
SOOP maintains that it had no motive to inflate revenue for IPO or investment purposes, citing the relatively small proportion of gaming advertisement sales in its overall revenue.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
