Due to the Impact of COVID-19... Disclosure of Fundraising and Restructuring Up 6.1% Year-on-Year

ESG Interest UP... Sustainable Management Report Disclosures Increase 118% Year-on-Year

[Asia Economy Reporter Minwoo Lee] Last year, disclosures related to fundraising and corporate restructuring increased due to the rapid environmental changes caused by the novel coronavirus disease (COVID-19). In addition, disclosures of sustainability management reports related to ESG (Environmental, Social, and Governance) also increased.

On the 18th, the Korea Exchange announced that the total number of disclosures by KOSPI-listed companies last year was 16,339, a 6.4% increase compared to the previous year. The average number of disclosures per company was 20.4, up by 1.2 from the previous year.

Provided by Korea Exchange

The sector with the largest increase in the number of disclosures was timely disclosures. It rose by 6.1% (767 cases) from the previous year to 13,355 cases, accounting for 71.7% of all disclosures. It is estimated that disclosures related to fundraising, corporate restructuring, and treasury stock increased due to the rapid environmental changes caused by COVID-19 and other factors.

The disclosure with the highest growth rate was related to corporate financial structure, specifically monetary loans and advance payment decisions. It increased by 59.2% (42 cases) from the previous year to 113 cases. Disclosures regarding companies’ decisions to acquire and dispose of treasury stocks, driven by sharp stock price fluctuations in the domestic stock market, followed with a 58.3% (217 cases) increase from the previous year. The total number of such disclosures was 589. Other notable increases included business transfer, division, and merger decisions due to corporate restructuring (52.3%, 58 cases increase), issuance of stock-related bonds (23.3%, 70 cases increase), and capital increase/decrease decisions (21.8%, 78 cases increase).

The largest portion of disclosures was related to settlement disclosures, which increased by 6.5% from the previous year to a total of 4,183 cases. This accounted for 31.3% of all timely disclosures. Comprehensive disclosures of major management matters related to investment decisions increased by 14.7% (63 cases) to 491 cases compared to the previous year. Since the system was implemented in May 2016, the number of such disclosures has steadily increased, with 276 cases in 2017, 336 cases in 2018, and 428 cases in 2019.

Meanwhile, the sector with the highest growth rate was voluntary disclosures. It increased by 10.1% (107 cases) from the previous year to 1,165 cases. Clarification disclosures, which are active corporate responses and information provision regarding rumors or reports, increased by 49.1% (27 cases) to 82 cases compared to the previous year. With growing social interest in ESG, voluntary publication and disclosure of corporate sustainability management reports increased by 118.2% (26 cases) to 48 cases compared to the previous year.

Fair disclosures increased by 6.3% (104 cases) from the previous year to 1,743 cases. While provisional earnings disclosures increased due to strengthened IR activities, earnings forecasts and prediction disclosures decreased due to increased future uncertainties. Inquiry disclosures increased by 18.8% (12 cases) to 76 cases. Although inquiry disclosures related to rumors and reports decreased due to the increase in comprehensive and clarification disclosures, inquiry disclosures related to market fluctuations surged.

English disclosures also increased by 10.5% (73 cases) to 770 cases. After the Korea Exchange launched a support service in September last year to translate Korean disclosures into English, the number of English disclosures and participating companies significantly increased.

A Korea Exchange official stated, "We plan to continuously strengthen disclosure education for listed companies to prevent violations of disclosure obligations. We will strive to enhance market soundness and protect investors by encouraging proactive and active disclosures by listed companies through strengthened real-time monitoring of the securities market and institutional improvements."

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