Enzychem Lifesciences: "Management Control Dispute Settled... Preparing to Resume Trading"

Application for an injunction to suspend the execution of duties withdrawn... Re-audit of fiscal 2025 begins

Enzychem Lifesciences is resolving legal disputes related to management control while undertaking a re-audit and strengthening its internal controls to resume trading in its shares.

According to industry sources on November 2, Enzychem Lifesciences disclosed that on October 29, the application for an injunction to suspend the execution of duties by CEO Son Kiyoung and inside director Kim Hyekyung was withdrawn. The company said this has partially eased uncertainty over management control, including the possibility of suspending the CEO's duties and appointing an acting CEO.

Enzychem Lifesciences corporate logo image. Enzychem Lifesciences

At an extraordinary general meeting held in July, all major agenda items, including the appointment of directors and an auditor and amendments to the articles of incorporation, were approved as originally proposed. According to the company's tally, more than 52% of the total issued shares voted in favor, and the approval rate among shares represented at the meeting exceeded 80%. The company viewed this as a sign of shareholder support for its normalization.

Last week, the company also began a re-audit of its financial statements for fiscal 2025. The re-audit will be conducted by Ichon Accounting Corporation, which audited the company for that fiscal year.

Enzychem Lifesciences received a disclaimer of opinion on its audit for fiscal 2025 because the auditor was unable to obtain sufficient audit evidence regarding the substance and accounting treatment of certain lending transactions. The loans that were questioned at the time have since been repaid. However, the company said repayment alone has not resolved all audit-related issues. It plans to cooperate with the auditor's review of the facts and fund flows related to the transactions, as well as their accounting treatment and the company's internal controls as a whole.

Alongside the re-audit, the company is reviewing and taking follow-up action on transactions involving treasury shares, investments in unlisted companies, and collateral. It plans to take steps in sequence to clarify the relationships arising from these transactions and reduce financial and legal burdens.

The company is also investigating the facts surrounding major transactions and conducting accounting and legal reviews. In addition to the company's own investigation, its internal auditor has engaged external experts, including a law firm and an accounting firm. The experts will review the circumstances surrounding the transactions, fund flows, and statements from relevant parties, and are expected to provide recommendations on clarifying transaction relationships, strengthening internal controls, and preventing recurrence.

Son Kiyoung, CEO of Enzychem Lifesciences, said, "The most important things right now are normalizing the company and resuming trading in its shares. If necessary to resume trading, I will make a decision in the way that best serves the company and its shareholders, including on my own position."

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