July Marks Critical Month for KOSDAQ as Delisting Risks Rise for 200 Companies

 
The critical month of July is approaching, bringing with it a strengthened delisting system for KOSDAQ companies. Starting July 1, the new regulations will intensify efforts to weed out underperforming firms. Currently, over 200 companies are at risk of delisting due to factors such as insufficient market capitalization, penny stock status, and repeated disclosure violations.
 
According to financial authorities, the enhanced delisting criteria will take effect on July 1. Companies with a market capitalization below 20 billion won, stocks priced under 1,000 won, or those accumulating 10 or more penalty points for disclosure violations (down from the previous threshold of 15 points) will be targeted for delisting. As of July 1, among the 1,822 KOSDAQ-listed companies (excluding SPACs), 134 have a market capitalization below 20 billion won, and 109 are classified as penny stocks. After excluding duplicates, approximately 203 companies are expected to fall into the potential delisting category.
 
In addition to market capitalization criteria, many companies are also facing challenges due to disclosure violations. Currently, 70 KOSDAQ companies have been penalized under exchange management standards, with 16 of them accumulating 10 or more penalty points. The company with the highest penalty points is Coas, with a total of 42 points, followed by Daewon Sys with 23 points, CCS with 22.5 points, and Korea Union Pharma with over 21 points. Concerns about financial stability are also rising, as three KOSDAQ companies have been newly designated as management issues this year due to capital impairment rates exceeding 50%: AB Pro Bio, Iwon Compo Tech, and DAP.
 
Market analysts predict that if delistings begin in July, the impact on retail shareholders could be significant. As of the end of last year, there were approximately 2.63 million retail investors holding shares in companies with a market capitalization below 20 billion won and classified as penny stocks. Some of these companies have thousands of individual investors, raising concerns that many will suffer losses if delistings occur.
 
A securities industry representative stated, "The authorities aim to eliminate companies that have only maintained their listings while increasing investor losses." However, given the high proportion of retail investors in the KOSDAQ market, it is essential to establish protective measures for minority shareholders during the delisting process.