The move marks a second round of audits following an investigation of 27 companies announced in July last year. The agency said it aims to curb unfair trading and help establish a “Korea premium.”
The NTS said the targets include 11 companies that profited through stock manipulation and accounting fraud; 15 owner families accused of tunneling profits and assets out of companies; and five illegal “stock tip rooms” accused of swindling money from financially vulnerable investors.
In the stock manipulation cases, the NTS said companies boosted share prices with false information and inflated performance, then offloaded their holdings onto small shareholders. Some also used accounting fraud, including issuing and receiving fake tax invoices to inflate sales and booking fictitious costs.
The agency also cited cases in which listed-company funds were diverted for private use, including transferring corporate assets to a CEO for free or siphoning off tens of billions of won disguised as loans.
More than half of the listed firms under audit have had trading suspended after external auditors refused to issue audit opinions, the NTS said. In some cases, share prices plunged to as little as one-tenth of prior levels, it said, deepening investor losses.
In tunneling cases, the NTS said the methods have grown more sophisticated. It cited repeated instances of steering business to owner-controlled or related companies, or inserting them into supply chains to collect what it described as “toll” profits.
Some companies allegedly paid personal legal fees and luxury purchases for controlling shareholders. Others invested hundreds of billions of won in funds managed by acquaintances with no investment experience, then routed the money to troubled companies controlled by the owners, the NTS said.
The agency also said it found cases in which business opportunities or key assets were transferred to companies owned by controlling families, stripping future growth engines and leaving losses to small shareholders.
The illegal tip-room operators allegedly lured investors with false or exaggerated ads such as “guaranteed high returns in a short period,” then dumped shares they had accumulated onto members to pocket trading gains. The NTS said they earned profits of tens of billions of won and evaded taxes by booking fake expenses.
The NTS said such practices distort the allocation of corporate resources and erode investor trust, contributing to falling share prices and market disruption. It said it will closely verify those involved and the full scope of transactions through the audits.
If it finds criminal conduct such as destruction of evidence or concealment of assets, the agency said it will file complaints with investigative authorities and seek criminal punishment.
An NTS official said the agency will “firmly establish the understanding that not a single won can be gained from unfair trading in the stock market,” adding it will respond strictly so a “Korea premium” can take hold based on transparency and trust.
* This article has been translated by AI.
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