The financial authorities decided to disclose a list of "low PBR" corporations with a price-to-book ratio (PBR) below 1, to induce improvements in corporate value. A PBR below 1, calculated by dividing market capitalization by shareholders' equity, means that if a corporation were liquidated, its market value would be lower than its asset value.
The authorities also will, in principle, block duplicate listings and plan to restructure the KOSDAQ market into a two-league system by dividing it into mature corporations and growth corporations.
Lee Eog-weon, Chairperson of the Financial Services Commission (FSC), on the 18th announced these measures to stabilize and strengthen the structure of the capital market at a meeting on "stabilization and normalization of the capital market" presided over by President Lee Jae-myung at the Blue House.
The Chairperson first said the list of low PBR corporations will be disclosed using a "naming and shaming" approach. By directly publishing the list, the measure is intended to prompt the listed companies to make improvements so they can be evaluated at their proper value on their own.
In addition, to prevent cases where duplicate listings undermine the rights and interests of ordinary shareholders, the authorities decided to, in principle, restrict duplicate listings in which a subsidiary and its parent company both enter the stock market.
A restructuring plan will also be prepared to channel more investment funds into the KOSDAQ market. The market will be reorganized into a two-league system by classifying companies as "mature innovative corporations" and "corporations in growth."
In addition, the financial authorities will significantly expand the joint response team and strengthen authorities such as the right to request communications data and the ex officio investigative powers of special judicial police to bolster the response to unfair trading, including stock price manipulation.