As the stock market continues to thrive, cases of noncompliance among listed companies have risen this year. While the total number of designations remains similar to last year, the number of KOSPI companies identified has surged by 30%. This increase is attributed to a series of corporate events leading to disclosure reversals and failures during the market's rapid ascent.
According to the Korea Exchange, as of June 6, there have been 110 cases of companies designated or warned for noncompliance in both the KOSDAQ and KOSPI markets. This figure is comparable to the 111 cases reported during the same period last year.
However, the trends differ by market. The number of KOSPI companies rose from 30 last year to 39 this year, a 30% increase. In contrast, KOSDAQ companies saw a decrease from 81 to 71, a drop of 12.3%.
Noncompliance is designated when companies fail to meet disclosure obligations. Common issues include failure to disclose, disclosure reversals, and changes in disclosures. The Korea Exchange first issues a warning before deciding on final designations after a review.
Final designations lead to penalties. If a company accumulates 10 or more penalty points, trading is suspended for a day. If points exceed 15 within a year, the company may be designated as a management issue. This is crucial for maintaining market trust and protecting investors.
This year, 19 companies were ultimately designated as noncompliant in the KOSPI market. Of these, 15 cases were due to failure to disclose, while there were two each for disclosure reversals and changes. Analysts suggest that the recent market rally has prompted companies to aggressively pursue investments and funding, leading to changes in plans and delays that resulted in disclosure violations.
One notable case involved J.R. Global REITs, which was designated for reversing its capital increase plan. Additionally, Daewon Electric Wire faced issues for disclosing its capital increase decision in December, nearly a year after it was made, leading to a designation for failure to disclose in January.
* This article has been translated by AI.
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