Exchange Initiates Planning Surveillance on Companies Subject to Substantive Review for Listing Eligibility

[Asia Economy Reporter Song Hwajeong] The Market Surveillance Committee of the Korea Exchange announced on the 4th that it is currently conducting a planned surveillance on unfair trading, such as fraudulent transactions, among companies subject to the substantive review of listing eligibility this year.

Compared to the same period last year, the number of companies with reasons for substantive review has increased by about 50%, showing a rising trend in the number of companies subject to substantive review. It is explained that companies subject to substantive review have a high possibility of fraudulent transactions such as embezzlement, breach of trust, and unfaithful disclosure, and there is a strong incentive to use undisclosed important information before trading suspension due to reasons for delisting, requiring meticulous market surveillance. As of the end of October this year, the number of companies with reasons for substantive review was 54, an increase of 18 companies compared to 36 companies in the same period last year.

The Market Surveillance Committee plans to analyze trading patterns for the 54 companies with reasons for substantive review and conduct focused analysis on unfair trading such as insider trading and fraudulent transactions.

The committee especially plans to conduct focused surveillance on companies with reasons for substantive review due to internal control deficiencies, such as embezzlement, breach of trust, and designation as unfaithful disclosure corporations. Among the companies with reasons for substantive review this year, 15 companies were found to have committed embezzlement or breach of trust, and 7 companies were designated as unfaithful disclosure corporations.

A Korea Exchange official explained, "The Market Surveillance Committee is currently conducting basic data analysis such as trading data and disclosure materials of companies subject to substantive review, and will analyze disclosure materials such as shareholding disclosures by major shareholders and executives to identify presumed insider accounts, followed by in-depth monitoring of the trading patterns of those accounts." The committee plans to promptly handle cases by notifying supervisory authorities if any unfair trading suspicions are found based on the analysis results.

This content was produced with the assistance of AI translation services.