Critical Deficiency
Celltrion Healthcare’s IPO on KOSDAQ within this year has become uncertain as doubt has been cast on the company’s past performance and future prospects since the initiation of a detailed examination of its financial statements by the Korean Institute of Certified Public Accountants (KICPA).
According to industry sources, Celltrion Healthcare failed to submit its registration statement to the Financial Supervisory Service by March 17. This is because of the initiation of the examination of the financial statements. The KICPA initiated the examination on March 13 after it found out a profit overstatement of approximately 10 billion won. Celltrion Healthcare passed the pre-listing examination by the Korea Exchange on March 14 and can be listed on KOSDAQ once it completes the required procedure by September 14.
The problem is that no one knows when the examination by the KICPA will be completed. For the company to be listed in June as it is planning to, the result of the examination should come out within a month and the result should state that the financial statements are not problematic at all.
The plan will go awry if the announcement of the result takes three months or more. In this case, the company has to conduct demand forecasting with foreign institutional investors before the announcement of the result and the investors are unlikely to make an investment based on its financial statements that require correction.