"We can't really do anything until the dual-listing guidelines come out."
This phrase has been circulating like a trend among initial public offering (IPO) industry officials since late last year. As the dual-listing controversy continues, the Korea Exchange (KRX) and financial authorities have moved to prepare related guidelines, but with the announcement repeatedly postponed, the lamentations are growing louder. The exchange initially aimed to release the dual-listing guidelines within the first quarter of this year. However, after LS Group withdrew the listing of Essex Solutions and the issue expanded beyond a simple market debate into a policy matter, the announcement was pushed back to June.
The problem is that delaying the guidelines does not reduce market confusion. On the contrary, the longer the regulatory vacuum lasts, the more companies preparing for listings face the double burden of adjusting schedules and persuading investors. As market uncertainty has prolonged, the IPO market has rapidly contracted. In fact, the size of public offerings so far this year has shrunk by nearly half compared with the previous year.
The bigger problem is the aftermath for companies whose listings have been blocked. A significant number of companies are required to pursue IPOs within a set period under agreements with financial investors (FIs). If a listing is delayed or falls through, the parent company may be forced to buy back the FI's stake or repay the invested capital. If the purpose of restricting dual listings is to protect existing shareholders, there are many voices arguing that the increased cash outflow and expanded financial burden on the parent company must also be weighed. It is difficult to dismiss the concern that, in the long run, the parent company's value could actually be impaired.
Of course, the dual-listing issue cannot be left unaddressed. Criticism has long been raised about the structure in which a parent company spins off a core business division for listing, diluting the value of existing shareholders. Establishing shareholder protection mechanisms and reforming corporate governance are also essential tasks.
Mending the barn cannot be avoided, but it is too late once the cow is already lost. Dual-listing restrictions should correct unfair market practices, but they must not block normal channels of capital raising. Rather than applying pressure, authorities should first remove the uncertainties scattered across the market so that companies and investors can operate within predictable rules. The longer the confusion surrounding dual listings drags on, the more that could be lost is not merely the listing opportunities of some companies, but shareholder value itself.
