A total of 45 corporations have been recorded as delisted due to settlement of account over the past five years (2020-2024). This includes six corporations from the KOSPI market and 39 corporations from the KOSDAQ market. The most common reason for their delisting was 'non-compliance with audit opinions,' accounting for 91.1% (41 corporations).
The Korea Exchange revealed this on the 5th and urged investor caution. An exchange official noted that 'the audit period is approaching for the 2024 fiscal year of companies with December settlement of account, and unexpected investment losses could occur due to important market measures such as delisting,' adding that 'particular caution is needed when investing in corporations that lack management stability or have poor financial conditions.'
In particular, the delisting status of 31 corporations (five from the KOSPI market and 26 from the KOSDAQ market) that were suspended from delisting due to non-compliance with audit opinions during the 2023 fiscal year will be determined by the audit opinions for the 2024 fiscal year.
The exchange also announced precautions for listed corporations. It stated that audit reports contain important information for investment decisions and must be disclosed immediately upon receipt, as market measures may follow. Specifically, audit reports and business reports must be provided to shareholders at least one week before the shareholders' meeting.
The exchange emphasized that precautions should also be taken when appointing outside directors and auditors along with holding regular shareholders' meetings. Listed corporations are required to appoint at least one-fourth of their total directors as outside directors. Outside directors cannot hold concurrent positions as directors, executives, or auditors in two or more other companies excluding the listed corporation, nor can they take on any full-time positions within the listed corporation.
The exchange stressed that failure to comply with these corporate law provisions could result in designation as a management item or grounds for delisting.