This article was displayed on the ChosunBiz MoneyMove (MM) site at 6:06 p.m. on Jul. 29, 2026.
As the government tightened delisting standards starting this month, pressure is mounting for marginal corporations to exit the market. The number of listed companies flagged for possible designation as issues under management due to falling short of the market capitalization standard this month alone reached about double the total for the first six months of the year.
The market expects marginal corporations to be pushed out of the stock market faster from the second half of the year, when the tougher standards are fully applied. In response, more listed companies are seeking external investment, including third-party allotment paid-in capital increases, to avoid delisting.
According to the Financial Supervisory Service's electronic disclosure system on the 29th, from the 1st to the day, a total of 23 listed companies disclosed "concern about designation as issues under management" for failing to meet the market capitalization standard. Considering that 12 listed companies made the same disclosure during the six months of the first half of this year, in just one month, about double the first-half total of corporations newly made the list of issues under management.
Earlier in Feb., the Financial Services Commission announced a "delisting reform plan for the swift and strict exit of insolvent corporations," saying it would move up the timing for tougher delisting standards from the original schedule. Accordingly, the market capitalization standard that was to be applied starting in Jan. next year was implemented early from this month. The Korea Exchange's main board raised the threshold to 30 billion won (previously 20 billion won), and KOSDAQ to 20 billion won (previously 15 billion won), and introduced new delisting conditions for so-called "penny stocks." The aim is to quickly remove marginal corporations with excessively low market capitalization and share prices from the market to reduce the potential for unfair trading and bolster confidence in the stock market.
With the tougher delisting standards in effect from July, the number of listed companies disclosing concerns about designation as issues under management is rising quickly. The number of companies making such disclosures, which stood at one to two per day until mid-month, rose to five on the 27th alone. Because concerns arise when market capitalization stays below the threshold for 25 trading days, the number of target corporations is expected to increase even faster starting in Aug. as the sub-threshold period accumulates.
An official in the capital markets industry said, "Unlike the penny stock requirement, under which the listing maintenance standard can be met relatively easily through a reverse stock split, it will likely be difficult to resolve a shortfall in market capitalization." Under the penny stock rule, if the closing price stays below 1,000 won for 30 consecutive trading days, the stock is designated as an issue under management, and if it then fails to stay at or above 1,000 won for 45 consecutive trading days within 90 trading days, it is delisted.
Under the new rule, if market capitalization stays below the threshold for 30 consecutive trading days, the company is designated as an issue under management. If, within 90 trading days, it fails to keep market capitalization at or above the threshold for 45 consecutive trading days, it is delisted. Falling short of market capitalization is a formal delisting ground for which the exchange does not separately assess a corporation's going concern, among other factors.
Accordingly, attempts to raise market capitalization to meet the listing maintenance standard are also increasing. A representative approach is a third-party allotment paid-in capital increase. The largest shareholder injects additional funds or transfers management control to a third party to attract investment.
A representative case is KOSDAQ-listed Jolse(018700). Jolse's market capitalization hovered between 15 billion and 20 billion won in the first half of this year. In response, it pursued a sale of management control through an 8 billion won third-party allotment paid-in capital increase, with payment completed on the 28th. If the new shares are issued on the 25th of next month, it appears the company will be able to maintain its listing.
In addition to Jolse, JK Synapse(060230), NUINTEK(012340) and Winhitech(192390) are also attempting to maintain their listings through the largest shareholder's participation in third-party allotment paid-in capital increases and sales of management control via paid-in capital increases.
An industry official said, "However, given current stock market conditions, not many will likely be able to secure investment successfully and maintain their listings."
This pressure to maintain listings is expected to grow next year. The market capitalization standard applied in July this year was implemented six months earlier than originally planned, and the threshold will be raised again in Jan. next year. The Korea Exchange's main board will rise to 50 billion won and KOSDAQ to 30 billion won. If market capitalization stays below the threshold for 30 consecutive trading days, the company is designated as an issue under management.