Ostem Implant Listing Substantive Review Postponed to Mid-Next Month (Comprehensive)

Published 24 Jan.2022 17:32(KST)

Concerns Over Prolonged Trading Suspension if Subject to Review

[Image source=Yonhap News]

[Asia Economy Reporter Kim Jin-ho] The Korea Exchange announced on the 24th that it has extended the deadline to determine whether Ostem Implant, which was involved in a large-scale embezzlement case, is subject to a substantive review of listing eligibility until the 17th of next month.

The Exchange stated, "Considering the need for additional investigation to decide whether Ostem Implant falls under the substantive review of listing eligibility, the investigation period has been extended by 15 business days," in a public disclosure on the same day.

It is known that the preliminary review period was extended due to the significant impact the Ostem Implant incident has on the market.

Previously, Ostem Implant announced on the 3rd that it had filed a complaint against employee Lee for embezzlement in the course of duty, which triggered the grounds for a substantive review of listing eligibility, resulting in a suspension of trading.

With the decision on whether it is subject to review delayed by half a month, all procedures have been postponed by 15 business days. The Exchange plans to decide by the 17th of next month whether Ostem Implant is subject to the substantive review of listing eligibility and will notify whether the trading suspension will continue or be lifted.

The market widely expects that Ostem Implant is likely to be subject to the substantive review of listing eligibility. Following the embezzlement case involving former management, the discovery of an embezzlement case involving an employee amounting to around 200 billion KRW revealed inadequate internal controls and raised concerns about accounting irregularities.

If it is decided to be subject to the substantive review of listing eligibility around mid-next month, the company must submit an improvement plan within 15 days. The Exchange will review the improvement plan within 20 days and forward it to the Corporate Evaluation Committee (CEC). Subsequently, the CEC will decide on one of three options: maintaining the listing, delisting, or granting an improvement period (within one year).

Meanwhile, as of the end of 2020, Ostem Implant had 19,856 minority shareholders. They hold about 55.6% (7.94 million shares) of the total issued shares, approximately 14.29 million shares.