Korea Exchange (KRX) decided to lift SCM Lifescience from its watchlist, then reversed the decision a day later and made a reassignment.
According to Korea Exchange (KRX) on the 17th, the exchange lifted SCM Lifescience from the watchlist after the close on the 16th. But it found an error during verification and at 2:28 p.m. that day designated it again as a watchlist stock.
As a result, the share price, which had jumped to the upper limit of 1,066 won (the daily price rise limit) during trading, plunged immediately. It later closed at 773 won, down 5.73% from the previous trading day.
SCM Lifescience was designated a watchlist stock in Mar. last year after losses from continuing projects before income tax expense occurred for two consecutive years. Under current rules, a company is designated a watchlist stock if losses of at least 1 billion won occur in two of the most recent three fiscal years and the amount exceeds 50% of shareholders' equity.
The exchange judged that the reason for the watchlist designation had been resolved based on factors such as a reduced loss and a turnaround to net profit in last year's annual report submitted by the company the previous day. In fact, SCM Lifescience's loss from continuing projects before income tax expense last year was 400 million won, a sharp decrease from 13 billion won the year before.
However, verification that day confirmed there was a problem with the lifting measure because no profit from continuing projects before income tax expense had occurred. The exchange said it corrected this during trading immediately, considering the potential for investor losses.
The exchange plans to conduct an internal audit on this matter and examine whether there are problems in the current system.
An exchange official said, "Along with supplementing the disclosure system using artificial intelligence (AI) technology, we will also take measures such as holding those involved accountable if necessary," adding, "We will make every effort to ensure stable market actions so that similar incidents do not occur in the future."