FSS "Large Unlisted Companies Must Submit Ownership Status Within 14 Days of Annual General Meeting"

[Asia Economy Reporter Lee Jung-yoon] As of the end of last year, unlisted joint-stock companies with total assets of 100 billion KRW or more must submit the ownership status of controlling shareholders and others to the Financial Services Commission and the Securities and Futures Commission within 14 days after the regular general meeting.

On the 31st, the Financial Supervisory Service (FSS) announced this and explained that if the separation of ownership and management is confirmed, the company may be subject to periodic designation.

The periodic designation system refers to the designation of external auditors for the next three business years for listed companies (excluding KONEX) that have freely appointed external auditors for six consecutive business years and large unlisted companies with no separation between ownership and management. Furthermore, the separation of ownership and management applies when the controlling shareholder and related parties hold 50% or more of the shares, or when the controlling shareholder or a related party shareholder is the CEO.

According to the FSS, among 3,222 large unlisted joint-stock companies in 2020, 28 were subject to periodic designation, and among 3,435 companies last year, 54 were subject.

Large unlisted joint-stock companies must submit data related to the separation of ownership and management, including the ownership status of controlling shareholders, to the Securities and Futures Commission within 14 days after the end of each business year's regular general meeting. If the data is not submitted, the Securities and Futures Commission may take measures such as restricting securities issuance or recommending the dismissal or removal of executives.

If a large unlisted joint-stock company that has submitted related data meets the criteria for no separation of ownership and management, it must submit the basic data report for auditor designation by September 14.

The FSS stated, "We plan to cooperate with the Korean Institute of Certified Public Accountants and others to provide guidance to ensure that large unlisted companies do not violate the External Audit Act," and added, "We will also respond promptly to consultations and inquiries via the FSS website or phone."

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