FSS "Large Unlisted Companies Must Submit Ownership Status of Controlling Shareholders and Others"

On the 26th, the Financial Supervisory Service (FSS) announced that large unlisted companies must submit the 'Ownership Status of Controlling Shareholders, etc.' to the Securities and Futures Commission under the Financial Services Commission within 14 days after the conclusion of the regular general meeting.

According to the FSS, the deadline for submitting ownership status data for approximately 1,190 large unlisted companies subject to periodic designation has arrived. In particular, the criteria for determining large unlisted companies this year have changed from assets of 100 billion KRW to assets of 500 billion KRW, so the number of target companies is expected to decrease significantly.

The reason large unlisted companies must submit data related to the separation of ownership and management is to verify whether they fall under the category of large unlisted companies with non-separated ownership and management subject to periodic designation. Listed companies that have freely appointed external auditors for six consecutive business years and large unlisted companies with non-separated ownership and management will be assigned external auditors for the next three business years.

The submission deadline is within 14 days after the conclusion of the regular general meeting of each business year, and companies must submit directly through the External Audit Contract Reporting System. In cases of failure to submit the data, the Securities and Futures Commission may take measures such as restricting securities issuance or recommending the dismissal or removal of executives.

Furthermore, if a large unlisted company that has submitted the stock ownership status meets the criteria for non-separated ownership and management, it must also submit the basic data report for auditor designation by September 14. The criteria for non-separated ownership and management are a large unlisted stock company with assets of 500 billion KRW or more as of the end of the previous business year, and a combined shareholding ratio of controlling shareholders and related parties of 50% or more of the total issued shares. Additionally, the company must be a stock company where the controlling shareholder or related party is the CEO.

An FSS official stated, "We will cooperate with organizations such as the Korean Institute of Certified Public Accountants to provide guidance to ensure that large unlisted companies do not violate the obligations under the External Audit Act," and added, "We will also respond promptly to consultations and inquiries via the FSS website or telephone."