A total of 52 companies have been delisted from the KOSDAQ market after undergoing substantive review over the past five years, raising concerns about the need for investors to carefully scrutinize companies for potential irregularities and delisting risks.
According to the Korea Exchange on the 4th, 172 KOSDAQ-listed companies triggered substantive review procedures over the past five years. By category, embezzlement and breach of fiduciary duty accounted for the largest share at 46 companies (26.2%), followed by inadequate disclosure with 27 companies (15.6%) and suspension of main business operations with 22 companies (13.1%).
Of these, 52 companies were ultimately delisted following substantive review. The primary reasons for delisting were embezzlement and breach of fiduciary duty at 18 companies (28.5%) and inadequate disclosure at 14 companies (22.2%).
Analysis showed that cases involving embezzlement and breach of fiduciary duty repeatedly exhibited warning signs such as frequent management changes, weakening business capabilities, expansion of new business investments, and loans to affiliated companies. Companies that compromised management transparency faced stricter review standards, resulting in higher delisting rates.