Trading Suspended One Year After Listing: IT Chem Faces Crisis Over Opaque Accounting

KOSDAQ-listed IT Chem reported consolidated revenue of 27.78983 billion won, an operating loss of 4.49460 billion won and a net loss of 5.76081 billion won in the first half of this year. Revenue fell 24.3% from the same period a year earlier, while the net loss more than doubled from 2.46448 billion won. On a standalone basis, the net loss was 11.51078 billion won, increasing by several dozen times from 209.05 million won in the same period last year.

IT Chem is a fine-chemical materials company that produces pharmaceutical intermediates, active pharmaceutical ingredients (APIs) and electronic materials for OLEDs. In the first half of this year, revenue from pharmaceutical raw materials totaled 13.914 billion won, accounting for 52% of the total, while electronic materials (OLED) generated 6.048 billion won, or 22%. At the time of its listing, the company entered the KOSDAQ in August 2025 on expectations that it would participate in the supply chain for Eli Lilly’s obesity treatment Mounjaro.

The impact of an adverse opinion and a 40 billion won CB issuance

However, despite generating 61.9 billion won in consolidated revenue in its first year as a listed company, 2025, IT Chem posted an operating loss of 1.8 billion won and a net loss of 14.3 billion won, immediately shifting from a profit in the year before listing to losses. The decisive blow came in the audit report for fiscal 2025. Woori Accounting Corporation, the external auditor, issued a “disclaimer of opinion” due to a limitation on the scope of the audit, stating, “We were unable to obtain sufficient appropriate audit evidence because the operation of internal control procedures related to fund transactions and asset acquisitions was inadequate, and procedures for identifying and controlling transactions with related parties were inadequately operated.”

This disclaimer of opinion points not simply to poor performance but to problems with the reliability of the company’s internal controls and fund flows themselves. The inability to obtain audit evidence for key items, including investments, construction payments and fund transactions with related parties, means that it was impossible for external parties to verify the flow of funds. Under KOSDAQ Market Listing Regulations, grounds for delisting arose, and trading in the company’s shares has been suspended since April 3.

The timing makes the issue more serious. In February 2026, just one or two months before grounds for delisting arose, IT Chem issued 40 billion won in convertible bonds (CBs) to domestic and overseas institutional investors, including Timefolio Asset Management. As accounting problems surfaced shortly after the large-scale fundraising, allegations of management’s moral hazard and controversy over inadequate due diligence by KB Securities, the listing sponsor, have emerged.

Improvement period granted, but survival remains uncertain

IT Chem submitted an objection to the Korea Exchange on April 24, and the exchange granted the company an improvement period through April 10, 2027. On Aug. 6, the company entered into an audit agreement with an accounting firm for fiscal 2025 and began the re-audit process. Regarding three lawsuits currently pending in which it is the defendant, the company said it expects the final outcomes will not have a material impact on the financial statements.

However, the general view in the accounting industry is that a “disclaimer of opinion” associated with embezzlement or opaque fund flows is difficult to resolve in a short period. The company must overhaul its internal control system during the improvement period and obtain an “unqualified” opinion in the re-audit, but the process may not proceed smoothly if structural problems involving related-party transactions are intertwined.

Stricter KOSDAQ delisting drive is a broader market problem

The IT Chem case is not limited to an individual company. As of the fiscal 2025 year-end reporting season, 22 KOSDAQ companies, including IT Chem, faced delisting risks after receiving “disclaimers of opinion.” In August 2026, 36 stocks were designated en masse as issues under administration because of insufficient share prices and market capitalizations, indicating a broader trend toward stricter delisting standards.

Lee Sang-jun, a researcher at NH Investment & Securities, said, “If the removal of financially troubled companies accelerates through the strengthened delisting system, the overall performance of the KOSDAQ market could improve, excessively high valuations could be resolved, and this could provide an opportunity for the index to recover.” Statistics showing that 1,353 companies newly listed on the KOSDAQ over the past 20 years, while only 415 companies were delisted, indicate that financially troubled companies have accumulated in the market for an extended period.

The fact that a company can face delisting over internal control problems less than a year after listing, despite passing a rigorous exchange review, raises fundamental questions about the credibility of IPO screening and the accountability of listing sponsors. IT Chem’s downfall, after receiving widespread market expectations based on a single positive factor—entry into the global supply chain under the “Mounjaro theme”—has become another case underscoring the importance of verifying internal controls before listing.