"One in Five Delisted Companies Related to 'Financial Statements'... Investors Should Be Cautious"

KRX Urges Market Participants to Exercise Caution During Settlement Period
One-Fifth of Delisted Companies Removed for Settlement-Related Issues
Investors Advised to Be Careful with Firms Facing Audit or Reporting Concerns

The Korea Exchange recently announced that more than one-fifth of the companies delisted over the past five years were due to settlement-related reasons, urging caution in related tasks.

According to the "2024 Fiscal Year Settlement-Related Market Participant Precautions" released by the Exchange on the 5th, a total of 212 companies were delisted from the KOSPI and KOSDAQ markets over the five years from 2020 to last year. Among them, approximately 21%, or 45 companies, were delisted due to settlement-related reasons. Specifically, 41 companies received adverse audit opinions, and 4 companies failed to submit business reports.

The Exchange explained that audit reports contain important information for investment decisions and may lead to market actions, so they must be disclosed immediately upon receipt. The Exchange also emphasized that special attention is required for holding shareholders' meetings and appointing outside directors and auditors, particularly stressing that audit reports and business reports must be provided to shareholders at least one week before the shareholders' meeting.

Investors were also urged to exercise special caution during the settlement period when important disclosures are concentrated. Since significant market actions such as delisting may occur during this period, potentially causing unexpected investment losses, it was pointed out that investors should be cautious when investing in companies with unstable management or poor financial conditions.

The Exchange stated, "We will make every effort to protect investors by establishing a cooperation system with external auditors regarding the submission of audit reports to induce prompt disclosure and take timely market actions against companies with adverse audit opinions."