L&K Biomed is at risk of being delisted by bourse operator Korea Exchange, according to industry sources on April 24.
The South Korean health care company’s stock trading has been suspended, as an external accounting auditor has issued a “disclaimer of opinion” on its internal accounting control system.
The auditor said that its foreign sales were recorded falsely. According to the auditor, L&K Biomed had considered products moved to a foreign unit as sales, though the related amount can only be included under foreign sales in financial statements if the products have been sold to foreign customers.
Although the company corrected this error, the auditor still issued a “disclaimer of opinion” over the accounting control system in the company.
The KRX will further evaluate L&K Biomed and decide whether the firm should be put on probation to correct its system, or delisted.
Established in December 2008, L&K Biomed mainly produces spine medical devices. It was listed on the secondary Kosdaq in 2016. The company’s sales reached around 31.3 billion won ($27.24 million) last year, and its operating loss posted 8.2 billion won.
By Song Seung-hyun (email@example.com)