87 Public Disclosure Violations Last Year... 76% Resulted in 'Warnings and Cautions'

[Asia Economy Reporter Ji Yeon-jin] The Financial Supervisory Service announced on the 3rd that it took measures such as fines against 73 companies (87 cases) that violated disclosure regulations last year.

This sanction included 21 cases (24.1%) of major measures such as fines and 66 cases (75.9%) of minor measures such as warnings. The violation rate of unlisted corporations (51 companies, 74.7%) remained high.

First, in the case of regular disclosures, there were 35 cases of failure to submit or late submission of business reports, etc. It was also found that repeated violations by unlisted corporations are increasing. One listed company showed differences in accounting treatment with an external auditor, resulting in delayed submission of external audit materials and failure to receive audit and review reports on time, which led to late submission of business and semiannual reports and imposition of fines. The Financial Supervisory Service stated, "Companies with weak financial structures are more likely to experience delays in external audits, which may lead to designation as a management item and delisting due to delayed or non-submission of regular reports, so caution is needed when investing."

There were also 12 cases of late disclosure when deciding on securities issuance such as paid-in capital increase, bonds with warrants (BW), and convertible bonds (CB). Additionally, there were 25 cases of omission in major event reports, including delayed disclosure of asset acquisition and disposal (3 cases), omission of external evaluation opinions (5 cases), and delayed disclosure of business suspension, commencement of rehabilitation, and disposal of treasury stocks (1 case each).

In the process of pursuing new listings of unlisted corporations, 5 cases were found where past public offering violations were discovered through due diligence by the lead manager. For example, one KOSDAQ-listed company imposed fines for failing to submit an amended securities registration statement reflecting the semiannual report confirmed before the subscription date after submitting the securities registration statement during the common stock offering process.

A Financial Supervisory Service official said, "Companies pursuing new listings should not rely solely on the lead manager for disclosure tasks but need to build their own disclosure capabilities (such as securing professional personnel). If disclosure violations related to fundraising are suspected to be linked to unfair trading, we will cooperate with the unfair trading investigation department for prompt investigation and strict measures. We will also improve the sanction procedures to promptly impose effective sanctions such as fines on companies that repeatedly violate disclosure obligations."

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