IHQ 제공.

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IHQ, a production company that once aspired to rival tvN in the entertainment industry, is on the verge of delisting. The company is set to undergo a delisting review by the Korea Exchange nearly 19 months after its stock trading was suspended in 2022 after an auditor issued a disclaimer of opinion on its financial statements, citing its failure to provide the necessary information. IHQ has since taken steps to improve its financial condition but has yet to secure additional funding.

The Korea Exchange said on Nov. 26 that it would hold a meeting to evaluate IHQ’s status as early as this week or by Dec. 2 at the latest. The review follows IHQ’s submission of a request for deliberation on whether its improvement plan is sufficient to avoid delisting. According to regulations, the Korea Exchange must convene a meeting within 15 trading days of receiving such a request.

IHQ was formed by merging with SidusHQ, the former agency of actors Jun Ji-hyun and Jung Woo-sung. In 2014, it acquired CU Media, expanding into the cable channel business. It evolved into a content production company, but financial woes soon marred its growth story.

The company’s troubles surfaced when Samil PwC, an accounting firm, issued a disclaimer of opinion for IHQ’s 2022 financial statements. The auditor cited insufficient evidence regarding the legitimacy of the company’s investment and financing transactions, acquisition values, and the appropriateness of impairment losses. A similar disclaimer was issued for the company’s 2023 financial statement.

Under Korea Exchange rules, an external auditor’s disclaimer of opinion subjects the company to a substantial review of listing eligibility, which can sometimes result in delisting.

[Kim Jung-eun]

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