SK Hynix is facing increased scrutiny regarding its plans for the Nasdaq listing of its U.S. subsidiary, Solidigm, as both the Financial Supervisory Service and the Korea Exchange have indicated that it falls under dual listing regulations. Lawmakers are also calling for the listing to be halted, citing potential harm to existing shareholders.
According to a report from the office of National Assembly member Ahn Cheol-soo on October 21, the Korea Exchange recently stated in a response to a parliamentary audit that "Solidigm qualifies as a 'subsidiary' under Article 78-2 of the Securities Market Listing Regulations and Article 70-3 of the Implementation Rules." Consequently, the Exchange explained that even if Solidigm lists on an overseas market, it must comply with shareholder protection obligations related to dual listings that apply to its domestic parent company, SK Hynix.
On October 19, Financial Supervisory Service Chairman Lee Chan-jin also expressed during a parliamentary audit that Solidigm's Nasdaq listing would violate dual listing regulations. With both the Financial Supervisory Service and the Korea Exchange taking the same stance, market analysts suggest that the likelihood of complications for Solidigm's Nasdaq listing has increased.
However, officials from the Financial Supervisory Service and the Exchange did not provide specific details on which provisions of the dual listing regulations Solidigm's case might violate. A Financial Supervisory Service official noted, "Being subject to dual listing review does not necessarily mean a violation of regulations has occurred." This implies that while Solidigm may be subject to dual listing scrutiny, it could still receive approval during the review process.
According to the 'Dual Listing Guidelines' issued by financial authorities and the Exchange in July, a dual listing may be permitted if it meets three criteria: operational independence, managerial independence, and investor protection. Solidigm is assessed to meet the standards for operational and managerial independence. However, the 'investor protection' review, which includes obtaining consent from general shareholders, is expected to be a key issue in determining the feasibility of a dual listing.
An official from the Exchange stated, "The decision on Solidigm's listing has not yet been finalized, and related obligations can still be fulfilled in the future, so it is not yet the stage to determine a violation of current regulations." The official added, "There are no fundamental means to prevent the overseas listing itself, but we will verify whether the parent company's board of directors fulfills the five major obligations and complies with disclosure requirements during the listing process."
Meanwhile, political and shareholder group opposition continues. Ahn Cheol-soo, a member of the National Assembly, claimed on his Facebook page on October 19 that Solidigm's listing could harm the interests of existing SK Hynix shareholders and urged government action. The Korea Corporate Governance Forum also issued a statement on October 20 calling for a halt to Solidigm's listing. Lee Nam-woo, chairman of the Korea Corporate Governance Forum, pointed out, "The essence of Solidigm's dual listing is a conflict of interest," stating that it creates a structure where controlling shareholders maintain control over Solidigm while shifting dilution costs solely onto general shareholders of SK Hynix.
* This article has been translated by AI.
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