Dong Sung Pharmaceutical Faces Administrative Issue Risk After Unfaithful Disclosure Designation... 'Administrator Kim Insu's Responsibility' Emerges

Dong Sung Pharmaceutical has once again been designated as an unfaithful disclosure entity by the Korea Exchange, bringing its accumulated penalty points to 14.5. This figure is just 0.5 points shy of the 15-point threshold that triggers designation as an administrative issue, which is the step prior to delisting.

According to the Financial Supervisory Service's electronic disclosure system on November 3, Dong Sung Pharmaceutical was given 6 penalty points by the Korea Exchange on October 30. With the addition of previous penalty points, the company's total now stands at 14.5. If the accumulated points exceed 15, the company may be designated as an administrative issue.

The reason for being designated as an unfaithful disclosure entity is that the company delayed disclosure for several weeks regarding lawsuits and rulings related to a management dispute. Although the lawsuits were filed on August 26 and September 2, and the ruling was made on September 16, Dong Sung Pharmaceutical did not disclose this information until October 10, nearly a month later.

This constitutes a serious violation of disclosure requirements for a listed company, where investor protection and transparent information release are paramount. Nevertheless, it is reported that court-appointed administrator Kim Insu has avoided responsibility by responding that a change in the disclosure officer is "not applicable" in this case.

A representative from Brand Refactoring pointed out, "Although Administrator Kim is effectively the company's representative, having been appointed by the court, he continues to take a passive stance, allowing repeated delays and concealment of information without any internal sanctions or structural improvements."

In fact, in July, Administrator Kim also received 8.5 penalty points and a fine of 85 million won for issuing a false disclosure stating that rumors of a management dispute were "groundless."

It has been pointed out that the consequences of these disclosure failures have been borne entirely by ordinary investors. Some claim that, due to Dong Sung Pharmaceutical's falling share price and liquidity constraints, shareholders have suffered tangible losses, and there are even reports that some institutional investors are divesting their stakes out of concern for potential losses.

There is growing criticism that Administrator Kim Insu is focusing more on defending management control and pre-approval M&A, rather than on normalizing the company.

In reality, while the company's disclosures are delayed or omitted, it has responded swiftly to lawsuits and legal strategies. This is seen as contrary to the transparency and responsible management expected of a listed company. The Brand Refactoring representative warned, "Disclosure is a promise to the market, and listed companies are obliged to keep it. If repeated delays in disclosure continue without sanctions, the process could quickly shift to a delisting review."

He further emphasized, "If Dong Sung Pharmaceutical fails to strengthen its internal monitoring system, hold those responsible accountable, and demonstrate genuine self-correction by management, the next warning it faces may not be designation as an administrative issue, but rather a delisting notice."