Home Business Celltrion plunged after the financial authorities resume supervision over allegations of accounting fraud

Celltrion plunged after the financial authorities resume supervision over allegations of accounting fraud

by news dir

photo = Yonhap News

Celltrion by the financial authorities(211,500 -6.00%)resumed supervisory procedures for violations of accounting standards. Celltrion and Celltrion Healthcare(84,600 -5.58%)and Celltrion Pharmaceuticals(121,200 -5.90%) stock prices plummeted.

The Financial Services Commission announced on the 23rd that it is in the process of deliberation on the supervision measures for the three Celltrion companies, recently posted by the Financial Supervisory Service. Since the second half of 2018, the Financial Supervisory Service has been investigating whether the accounting treatment, such as transactions between affiliates of Celltrion and inventory recognition, is appropriate. It is said that a conclusion was reached mid-year last year, but no follow-up procedures were carried out.

On this day, Celltrion closed at 211,500 won, down 13,500 won (6%) from the previous day, and Celltrion Healthcare at 84,600 won, down 5.58% from the previous day. Celltrion Pharm also closed at 12,1200 won, down 5.9 percent.

Celltrion’s stock price soared to 390,000 won last year, but it continued to decline due to sluggish earnings, such as delays in European approval of Recklona, ​​a treatment for COVID-19. Expectations for a share price recovery increased after Recklona received product approval in Europe this month.

The financial authorities are said to be intensively looking into whether Celltrion is properly accounted for in a series of transactions that sell generic drugs (biosimilars) to Celltrion Healthcare and then sell them to overseas retailers and medical institutions. There were voices in the industry and in the political circles also raising questions about Celltrion Healthcare’s cumulative inventory recognition problem and the appropriateness of the transaction price.

The Financial Supervisory Service is known to have come to the conclusion that Celltrion Healthcare and Celltrion Pharm reduced their inventory losses during the auditing process. If the Supervisory Committee under the FSC makes a judgment on this, the final measures will be finalized through the Securities and Futures Committee of the FSC. If it is concluded that the accounting fraudulent is intentional, it is expected that fines will be imposed and the prosecution will be charged.

Reporter Lee Hyun-il [email protected]

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