For listed companies, a trading halt and delisting go beyond simple sanctions. The moment stock trading stops, market trust collapses rapidly and funding channels are effectively blocked. With business normalization itself under threat, the capital market takes this as a measure close to a "notice to exit."
Company A, which had trading suspended due to the CEO's breach of trust allegations and barely resumed trading after an eight-month improvement period, was also a company at the center of such a crisis. Attorney Lee Hyeong-jin of Barun Law, who advised at the time, defined the matter not as a simple executive's deviation but as a failure of internal control and overall governance. Lee said, "Resuming transactions is not about cleaning up an incident; it's a process of proving to the market 'whether this is a company worth investing in again.'" The following is a Q&A with Lee.
— Why did you not see the essence of Company A's case as simple breach of trust?
"There were clearly structural problems to dismiss it as an individual executive's deviation. Internal control mechanisms did not function properly, and systems to check management were effectively neutralized. The exchange also put greater weight on the question of 'why such a thing was possible within the company.'"
— What was most important in the initial response?
"We first had to rigorously determine whether the conduct in question actually constituted breach of trust. There was an argument it was a business judgment, but because the board procedures were bypassed and signs of pursuing private gain were identified, we had no choice but to deem it a breach of trust. In the end, it was necessary to draw a clear line through a criminal complaint."
— What was the key after filing the criminal complaint?
"The crux was persuading the exchange. From the outside, there could be a misunderstanding of a 'slow response,' so we focused on explaining in tight chronological order what investigations and reviews we conducted and how we reached our conclusion."
— What was the core logic in persuading the exchange?
"We are past the phase where simply removing the problem automatically leads to resumption of transactions. The listing eligibility review is effectively a process of reassessing the entire corporations. Legal action and improvements to internal controls are basic, and on top of that, you must prove business continuity and financial soundness. We approached it as 'effectively going through an IPO again.'"
— Why did you see it that way?
"Recently, the capital market has two simultaneous currents: 'value-up' and 'exit of poorly performing companies.' So 'surgical treatment' that only removes the cause of a trading halt is not enough. In line with the trend, you must look not only at management transparency but also at business continuity and financial soundness. Once you enter a listing maintenance review, you should think of it not as excising only the affected area but as having the entire company's health and constitution re-checked."
— What measures did you focus on most during the improvement period?
"Restructuring governance and refining the decision-making process. But trust does not return just by changing systems. Ultimately, people who actually operate those systems are key, so we worked hard to appoint an outside professional manager as co-CEO."
— Why was appointing a professional manager as co-CEO important?
"No matter how good the system is, it is meaningless if the person operating it does not earn the market's trust. The appointment process itself had to be transparent, and, in the eyes of the market, shareholders, stakeholders, and the exchange, it had to convincingly demonstrate reform-mindedness, expertise, and the will to normalize the company."
— What is the most common mistake corporations make in such a phase?
"It is the optimism that once civil and criminal measures and internal control improvements are completed, resumption of transactions will naturally follow. That is no longer the case. Surgical treatment that removes only the cause of the incident is not enough; a comprehensive diagnosis of the entire company's health is needed."
— What do you think your role was in this case?
"I believe I served not only as legal counsel but also as a bridge connecting stakeholders inside and outside the company. There are always perception gaps among management, employees, shareholders, the accounting firm, and the exchange. It was important to fill the 'between-the-lines' that do not make it into the improvement plan implementation report. We needed a process of explaining, one by one, that the company is actually changing, what efforts are being made internally, and why these judgments are being made. As I focused on that process, I even heard I was 'an in-house lawyer dispatched to Company A from Barun.'"
— What should listed companies experiencing trading halts or delisting fears check first?
"From an outside perspective, you must first check whether the company's decision-making structure operates rationally. The key is whether internal controls are more than formalities, whether the audit body functions independently, whether external advice or outside directors' opinions are actually reflected in management, and ultimately whether management is willing to accept change. It is important to operate the audit system and internal controls on a standing basis. After a problem arises, independent investigation and an initial response come first. Barun consolidated the Company A matter into a single solution encompassing civil and criminal responses, exchange procedures, and collaboration with the accounting firm."
— What message does this Company A case send to other listed companies?
"It is that you should not view risk merely as something to be cleaned up, but as an opportunity to make the company sustainable. The more a crisis intensifies, the easier it is to push listing-related risks to the back burner; that is when a comprehensive diagnosis that squarely faces the issues from an outside perspective is needed even faster."