Ten firms face delisting from KOSDAQ on Oct.11
[THE INVESTOR] Ten companies face delisting from Korea’s tech-heavy KOSDAQ on Oct.11 amid stricter audit standards, according to stock market operator Korea Exchange.
They include Moda, Gamma Nu, NexG, Trais, C&S Asset Management, Woosung I.B., Winergys, Finetex EnE, Raygen and Global Display. As the delisting would affect more than 80,000 shareholders, the KRX has given investors seven business days to sell their shares before the firms are kicked off the bourse.
The KRX had previously ordered a total of 15 KOSDAQ companies to undergo a new round of auditing after they failed to receive an audit opinion. Among them, a dozen missed the deadline, while one -- M-Venture Investment -- belatedly submitted a revised audit report on Sept. 27 and another firm PATI Games is scheduled to present its report on Sept. 28.
“Some of these companies have been incurring losses for years or have been involved in embezzlement,” said an official at KRX. “Delisting is necessary to protect investors and maintain soundness of the capital market.”
Analysts say more companies face delisting this year as external auditors reinforced their auditing standards ahead of the implementation of the new act on external audit in November. The act includes stronger punishment for lax auditing practice. Last year, only six companies out of 15 were expelled from the secondary market after failing to receive an audit opinion.
Not all shareholders were happy with the decision, with some of them gathering on Sept. 27 to stage a protest. They claimed that the companies should have been cut some slack, and the KRX should take into consideration that the digital forensic method that was newly adopted this year is delaying the re-audit process.
By Park Ga-young (email@example.com)