Following Geumyang's official submission to the Korea Exchange on the 23rd detailing its implementation of the management improvement plan, the delisting review procedure sparked by the external auditor's refusal is expected to proceed in earnest by the end of this month. The exchange plans to convene the Listed Company Disclosure Committee on May 26 to make a final judgment on the company's continued listing. The core issue in this review is the fact that the external audit firm has raised serious doubts about the company's financial condition and viability. Listed companies that do not receive a clean opinion from an accounting audit are subject to the exchange's strict scrutiny from an investor protection standpoint. Geumyang has been facing a crisis after receiving another refusal of opinion on its audit report for 2024, following the same in the previous year.
Shinhan Accounting Law Firm, serving as the external auditor for Geumyang, announced in its audit report released last March that the company recorded an operating loss of 41.836 billion won and a net loss for the period of 53.587 billion won during the reporting period ending December 31, 2025. Furthermore, the report pointed out that as of December 31, 2025, current liabilities exceeded current assets by a staggering 611.243 billion won. The fact that current liabilities significantly exceed current assets means that debts due for short-term repayment are greater than assets that can be liquidated immediately, which is interpreted as a clear signal that the company's financial situation is extremely tight. Based on this severe financial situation, the auditor judged that there were significant doubts about the company's ability to continue as a going concern, leading to the refusal of the audit opinion.
There are still many procedures to come in the future, and tension is mounting. If the Listed Company Disclosure Committee decides to delist the company, a three-business-day delisting notice period is first granted. During this period, the company typically files for a lawsuit to invalidate the delisting decision and a preliminary injunction to suspend the effect at a court. If the court accepts this preliminary injunction application, the delisting procedure will be temporarily halted until the result of the substantive lawsuit is revealed. Conversely, if the application is rejected, the process proceeds to the final delisting sequence after another three-business-day notice period. Subsequently, a seven-business-day settlement trading period is granted, allowing investors to buy and sell stocks for the last time, and it is expected that the company's valuation will be reassessed during this process.
Established in 1978, Geumyang was a traditional company that produced propellant and fine chemical products but attracted significant market attention in the 2020s as it expanded into the secondary battery business. On July 26, 2023, the stock price surged to 194,000 won during trading, achieving a milestone with a market cap nearing 10 trillion won. However, following this success, the situation deteriorated rapidly due to inadequate capital raising compared to the pace of business expansion and increasing financial burdens. By March 21 last year, just before the trading halt, the closing stock price fell to 9,900 won, representing a 94.9% decline from the peak, and the market cap also shrank to the range of 630 billion won. The company side has stated that it is focusing on attracting domestic and foreign institutional investors and plans to show tangible results before the meeting of the Listed Company Disclosure Committee. However, the likelihood of maintaining its listing will diverge depending on whether Geumyang can actually find a lead to secure funding and improve its financial structure in the future.