Inadequate Disclosures Total 45 in Jan.-April Period

Korea Exchange announced on May 4 that the number of listed companies that made an unfaithful disclosure totaled 45 for the first four months of this year. The number is second only to 46 recorded two years ago.

The number increased faster in the KOSDAQ market than in KOSPI. Specifically, the number in that market totaled 42 during the period, three more than in the previous year.
 

Last year, the number of such companies hit an all-time high of 113, including 14 in KOSPI. Experts point out that it is likely to reach a new high this year if the current pace continues.

Korea Exchange designates non-disclosure, reversal of disclosure, and change in disclosure as unfaithful disclosures. Once a listed company’s related penalty point exceeds 15 in one year, Korea Exchange initiates a listing eligibility review process in that company. In other words, the company can be delisted.
 

Canceled or deferred paid-in capital increase accounts for 10 out of the 45 cases. In addition, non-acquisition of shares from another company and a change of 50 percent or more in transfer value account for nine. “It seems that a number of companies were compelled to cancel or defer paid-in capital increase with the COVID-19 pandemic exacerbating their financing conditions,” said an expert.

The 45 cases include seven belated disclosures related to a change in the largest shareholder or the largest shareholder’s stock-based contract. Also, those include four belated disclosures related to accusation or court judgment.

Copyright © BusinessKorea. Prohibited from unauthorized reproduction and redistribution