Ssangyong Motor Receives Audit Opinion Disclaimer... Facing Delisting Crisis

[Image source=Yonhap News]

[Asia Economy Reporter Lim Chun-han] Ssangyong Motor, struggling with the initiation of a short-term court receivership (P-Plan), has ultimately received a disclaimer of audit opinion.

According to the Financial Supervisory Service's electronic disclosure system on the 23rd, Ssangyong Motor submitted an audit report to the Korea Exchange for the 2020 fiscal year in which Samjong Accounting Corporation issued a disclaimer of audit opinion. The auditor cited uncertainty about the company's ability to continue as a going concern and an adverse opinion on the internal accounting control system review as reasons for the disclaimer.

According to Article 48 of the Korea Exchange's Securities Market Listing Regulations, if the audit opinion on the individual or consolidated financial statements for the most recent business year is adverse or a disclaimer, the Exchange will delist the common stock. However, delisting may be postponed if the auditor submits a statement proving that the issues have been resolved before the start of the orderly sale period.

The Korea Exchange announced on the same day, "Since Ssangyong Motor's stock meets the delisting criteria, the delisting procedure will proceed," adding, "The deadline for filing objections is April 13." Trading of Ssangyong Motor's shares is currently suspended.

Ssangyong Motor's capital impairment ratio was 111.8% based on consolidated financial statements at the end of last year, indicating a state of complete capital erosion. Ssangyong Motor, which has posted losses every year since 2017, recorded an operating loss of 449.4 billion KRW last year, significantly increasing the deficit compared to 281.9 billion KRW in 2019. Last year's sales amounted to 2.9502 trillion KRW, a decrease of 18.6% from the previous year.

Ssangyong Motor is effectively at a crossroads as the final investment decision by the major investor HAAH Automotive is delayed, and the Korea Development Bank demands "painful efforts" as a condition for support. Ssangyong Motor's labor and management are currently negotiating a plan to pay only 50% of employees' wages for March and April.

This content was produced with the assistance of AI translation services.