'1st Generation Ceramic Company' Haengnamsa Finally Decides to Delist

Frequent Management Issues Such as Accounting Standard Violations and Transaction Losses
Attempts to Prevent Delisting Through Appeals Proved Insufficient

[Asia Economy Reporter Park Jun-yi] The delisting of Haengnamsa, a first-generation domestic ceramics company, has been decided. Despite expanding its business in various directions to improve management, it ultimately failed to achieve a turnaround.

According to the Financial Supervisory Service's electronic disclosure system on the 31st, Haengnamsa will undergo a 7-day orderly trading period from January 4 to 12 next year and will be delisted on the 13th of the same month. This is the result of the KOSDAQ Market Committee's review and resolution on Haengnamsa's delisting held on the 29th.

Founded in 1942, Haengnamsa was the first ceramics manufacturer in Korea and enjoyed its heyday alongside Korea Ceramic until the 1990s. It swept the industry's 'first' titles by producing the first coffee cup set domestically in 1953 and exporting ceramics overseas for the first time in 1963. In September 1993, it was also listed on the KOSDAQ market.

However, in the 2000s, domestic demand for ceramics declined, and sales dropped as European ceramics companies and low-priced Chinese ceramics companies increased their market share in Korea. Consequently, in 2015, the company was sold to The Media, an internet broadcasting service provider.

To improve management, Haengnamsa acquired Sanai Pictures and the film company Wolgwang in 2018 and entered the film production and distribution business. Renaming itself as 'Studio Summer,' Haengnamsa led 65% of its total sales by the third quarter last year with the film 'Don.' It also expanded its portfolio by entering the kimchi manufacturing industry.

However, with declining sales and frequent management issues, Haengnamsa ultimately proceeded with delisting.

The Securities and Futures Commission under the Financial Services Commission designated Haengnamsa as a subject for substantive review of listing eligibility in July last year due to violations of accounting standards such as omission of unpaid amounts and overstatement of sales, and suspended its trading. In August, it disclosed that it incurred losses of approximately 35.7 billion KRW due to a price drop after engaging in Contracts for Difference (CFD) transactions linked to domestic listed stocks through three securities firms. Subsequently, Haengnamsa made strenuous efforts to avoid delisting by submitting objections and improvement plan implementation reports, but ultimately failed to prevent it.

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