Deadline for Semiannual Report Submission... 42 Companies Including Ssangyong Motor Designated as Management Items

[Asia Economy Reporter Hyunseok Yoo] On the last day for submitting semi-annual reports, the 14th, 42 companies including Ssangyong Motor were designated as management stocks due to auditor opinion deficiencies and failure to submit reports.

According to the Korea Exchange, as of 8:41 PM on that day, a total of 42 companies were designated as management stocks for these reasons.

By market, on the KOSPI, three companies including Ssangyong Motor, Heung-A Shipping, and Yuyang D&U were designated as management stocks due to auditor opinion rejections.

On the KOSDAQ market, 39 companies including Gyeongnam Pharmaceutical Healthcare and Jenax were designated. Among them, 33 companies were designated due to auditor opinion deficiencies such as adverse opinions, opinion rejections, or scope limitations, and 6 companies failed to submit reports.

Among the 42 companies, 28 including SJK triggered delisting reasons.

The Exchange designates a stock as a management stock on the next trading day after the deadline if the semi-annual report is not submitted on time, and on the day after the auditor’s report submission if the auditor’s opinion is deficient. When designated as a management stock, trading is suspended for one day on the day of designation.

If a company designated as a management stock fails to submit the next regular report (failure to submit two consecutive regular reports on time or failure to submit three regular reports within two years), or if the company fails to resolve the reasons for designation related to accounting issues, delisting reasons may occur.

External auditors express one of the following opinions on the financial statements of the audited company: unqualified, qualified, adverse, or disclaimer of opinion. Among these, a qualified opinion is given when the audit scope is partially limited or there are some matters not in accordance with corporate accounting principles that do not significantly affect the financial statements.

An adverse opinion indicates that the financial statements are distorted. Auditors express this when the issue is more serious than a qualified opinion.

A disclaimer of opinion is given when the auditor cannot obtain reasonable evidence to express an opinion on the entire financial statements, when significant issues are found that question the company’s existence, or when the auditor cannot perform an independent audit.

On the other hand, an unqualified opinion means that the financial statements fairly present the company’s financial position, operating results, and cash flows in accordance with accounting standards.