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Samsung Heavy Shares Slip After Report of Audit: Seoul Mover

April 23 (Bloomberg) -- Samsung Heavy Industries Co., the world’s second-largest shipyard, fell to its lowest level in more than two years in Seoul trading after the Korea Economic Daily said Samsung Group is auditing the company.

The stock slumped 6.4 percent to 29,150 won, the lowest level since January 2012, after plunging as much as 7.9 percent earlier. The benchmark Kospi index lost 0.2 percent. Shares in Seoul-based Samsung Heavy have tumbled 23 percent this year.

Samsung Group has been conducting an internal audit on the shipbuilder since February, the newspaper reported, citing officials at the group it didn’t identify. Samsung Group is focusing on the possibility the company may not have properly reflected orders with value less than costs in its financial statements, the report said.

“We can’t confirm any details at the moment because we haven’t received the results of the business assessment,” Samsung Heavy spokesman Koo Sang Ok said by phone today. Two calls to Samsung Group weren’t immediately answered.

Samsung Electronics Co., the world’s biggest phonemaker and the flagship company of the group, is the largest shareholder of Samsung Heavy with a stake of 17.6 percent, according to data compiled by Bloomberg. The phonemaker rose 1 percent today.

“This is bad news for the company and investors if it proves to be true,” Lee Ji Hoon, an analyst at SK Securities Co. in Seoul said by phone. “The company’s share price will likely be impacted negatively for some time if orders were improperly reflected.”

To contact the reporter on this story: Sharon Cho in Seoul at ccho28@bloomberg.net

To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net Allen Wan

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