Three Kosdaq-listed companies warned of delisting for accounting ineptness

2019.08.14 14:23:19

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Three members of the secondary Korea Securities Dealers Automated Quotation (Kosdaq) market could face delisting if they fail to meet requirements in their first-half earnings report due on Wednesday.

According to South Korea’s sole stock exchange operator Korea Exchange (KRX), three companies – Suntech Co., FusionData Co., and IM Tech Inc. – may be shown out of the junior bourse if they fail to meet any of the requirements for clearance on first-term reports by deadline on Wednesday for firms whose fiscal year ends in December.

Companies on administrative blacklist can be delisted if they are not able to resolve issues that have been raised for incompliance in financial papers or capital requirements. Suntech did not turn in first-quarter earnings report.

Under the country’s capital market law, a listed company must submit quarterly and semi-annual reports within 45 days after the end of each quarter and semi-annual period. Failing to do so can place it on the administrative blacklist. If it does not submit two consecutive reports within deadline or three periodic reports in two years, it can face delisting.

Suntech for incompliance may be on path for exit after it received a disclaimer opinion from its auditor for its first-half financial statement. The company could avoid being delisted immediately if it submits its first-half term report before deadline on Wednesday.

IM Tech and FusionData are involved in accounting-related matters.

Companies listed on the Kosdaq market are warned if liabilities exceed paid-in capital by 50 percent at the end of the fiscal year or half-year or if they have less than 1 billion won in equity. IM Tech and FusionData fall under such category. If the companies fail to resolve such issues, they will immediately undergo delisting procedure.

KRX also noted that other companies, such as Moda Inc., Barun Electronics Co., and Smark Co., may fall under possible delisting category due to capital issues. Kolon Life Science whose license in gene therapy durg Invossa was cancelled for mislabeling ingredient it used may also be pushed out.

Kolon Life Science received a “qualified opinion” from its auditor for its first-quarter report. The company could fall under administrative issue this time if it receives qualified opinion for the first-term report.

There are no candidates from Kospi with delisting danger.

By Chung Seung-hwan and Lee Eun-joo

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