Kim Hayong, the CEO of Kips Biopharma (Kipspharma), stated on May 7 that the recent article raising suspicions about the inventory assets of the company's subsidiary is "completely baseless and groundless," and added, "We will respond strongly to these unfounded allegations."
Samil Accounting Corporation, the designated auditor for both Kipspharma and its subsidiary Battery Solutions, conducted a thorough audit of Battery Solutions last year in preparation for its upcoming listing.
A representative from the accounting firm explained, "The claim that the company increased its raw material inventory assets to boost net profit is not true. Most of the increase in Battery Solutions' inventory assets was due to the application of stricter accounting standards for raw materials. An increase in raw materials does not lead to an increase in net profit."
Battery Solutions imports a significant portion of its raw materials, specifically used batteries, from overseas. Until 2023, goods in transit by sea were recorded as advance payments. However, based on the designated auditor's opinion, starting in 2024, raw materials in transit are considered to be under the company's ownership and are now accounted for as inventory assets. Nevertheless, the increase in inventory assets due to raw materials is entirely unrelated to any increase in net profit.
Kim Hayong, CEO of Kipspharma, stated, "It is extremely regrettable that such malicious and factually unfounded allegations have been raised while we are already undergoing a thorough designated audit by Samil Accounting Corporation," and added, "We will mobilize all of the company's resources to respond strongly to these groundless suspicions, which have caused significant harm to the company and its shareholders."
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