As the government intensifies its push for capital market structural reform, delisting defense has emerged as a new battleground in the legal industry. Major Korean law firms are deploying experts from financial regulators and the Korea Exchange (KRX) to the front lines. With Kosdaq delisting criteria substantially tightened from July this year — including the removal of so-called "penny stocks" — a wave of related corporate litigation is anticipated.
According to the legal industry on the 9th, Kim & Chang is fielding its accounting supervision team, regarded as the largest in Korea for delisting defense. The firm has operated the team since the substantive review system was introduced in 2009. Attorneys Kim Doo-bong, Moon Jong-il and Kim Min-seok, among other accounting audit and exchange specialists, collaborate organically. Going beyond after-the-fact remedies, Kim & Chang offers preemptive governance improvement and M&A solutions through comprehensive analysis of business continuity, financial soundness and management transparency.
A Kim & Chang representative said, "As strategic measures to enhance corporate value through M&A, business restructuring and strengthened market communication such as IR are strongly in demand, advisory demand for Kim & Chang — which is well-versed in regulatory trends and the exchange's qualitative review standards — is rising." He added, "Beyond resolving problems that have already occurred, we provide a variety of practical solutions to help listed companies establish preemptive response strategies under the changed regulatory environment and turn them into new growth opportunities."
Lee & Ko has built a delisting response team centered on attorneys Cho Jun-woo and Park Hyun-soo, along with KRX veterans such as Advisor Lee Kyu-yeon, a former managing director of the KRX KOSPI Market Division; attorney Park Kwang-bae, former chief of the Securities Crime Joint Investigation Team at the Seoul Southern District Prosecutors' Office; and attorney Sung Chang-ho, former chief judge of the securities division at the Seoul Southern District Court.
Lee & Ko highlights its success in overturning the delisting decision of Gammanu (now Oneul ENM). Cases where companies have won lawsuits seeking to nullify delisting decisions remain few, with Gammanu among the rare examples.
Bae, Kim & Lee is running a "Listing Risk Response Task Force," led by foreign attorney Kim Hak-kyun, former chairman of the KRX Kosdaq Market Committee, and Advisor Kim Yong-sang. The firm has strengthened its governance solutions encompassing policy judgment and market trends by recruiting former Financial Services Commission Chairman Koh Seung-beom as an advisor and Ra Seong-chae, a former KRX managing director.
Yulchon is responding through collaboration between its M&A Corporate Advisory Division and Capital Markets Unfair Trading Center. KRX veterans including advisors Kim Jae-jun, Yang Yeon-chae and Chae Hyun-ju work in tandem with attorneys Jang Bo-seong and Lee Hwa-seok. The firm recently recruited attorney Lee Young-hye, who has experience at the Financial Supervisory Service, the capital markets special judicial police and crypto exchange Dunamu.
Shin & Kim has strengthened its listing maintenance response team by recruiting Cho Hyo-je, former deputy governor of the FSS, and Lee Chung-yeon, former deputy head of the Kosdaq Market Division. Together with attorneys Seo Tae-yong and Yoo Mu-young, they provide multi-dimensional advisory services. Shin & Kim specializes in responding to various exchange actions related to listing maintenance, including trading suspensions, designation as administrative issues, disclaimers of audit opinions and grounds triggering substantive listing eligibility reviews. In March, the firm held a seminar on "Corporate Response Directions Under the Kosdaq Market Revitalization Policy" and released its market trend analysis.
Hwa Woo fields attorney Jeong Sung-bin, who boasts the most extensive track record with over 100 delisting defense cases. Together with Advisor Jeong Un-soo, a former KRX vice chairman, and Advisor Kim Sung-tae, a former managing director, the firm is recognized for its competitiveness across complex issues spanning disclosure, accounting and criminal matters. Hwa Woo's delisting response team analyzes market mechanisms and regulatory decision criteria to build effective defense strategies.
Jipyong has provided consulting to challenging review targets — including a construction company "J," franchise firm "M," and semiconductor and pharmaceutical companies — through its Listing Maintenance Support Center led by Advisor Chae Nam-ki, a former KRX vice chairman. About 30 experts, including Managing Partner Lee Haeng-kyu and Senior Professional Fellow Jang Young-eun, support comprehensive consulting spanning forensics, internal investigations and financial litigation. Analysts say the firm specializes in preemptive risk management aligned with the Value-Up initiative.
Barun Law operates a delisting response team centered on Managing Partner Kim Do-hyung and attorney Cho Jae-bin, strengthening advisory services for distressed companies. The firm has deployed Advisor Yoon Ki-jun, a former head of the KRX listing review department, along with attorneys Lee Hyung-jin and Choi Seung-hwan, to handle trading resumption, responses to the Corporate Review Committee, and internal control improvement advisory. It also offers a "two-track strategy" combining exchange reviews and court litigation.
Daeryuk Aju responds through its M&A team, including attorneys Kang Kyung-kook, Kim In-jin, Oh Sung-jin and Lee Chang-min, and its corporate restructuring team, including attorneys Kim Jung-dong and Lee Wang-min.
Dongin won a first-instance victory on the 10th of last month in a lawsuit seeking to nullify a delisting decision, representing Cheil Bio. Dongin attorney Kim Sang-il said, "It was a case where the court found that, even with a disclaimer of audit opinion, there were no grounds warranting delisting."
The reason major law firms are reinforcing their delisting response practices is the growing legal demand from companies. With Kosdaq delisting criteria substantially tightened from July — including adding so-called "penny stocks" trading below 1,000 won to delisting targets — related litigation is expected to rise. A simple simulation by the KRX reflecting the new measures projected that the number of Kosdaq delisting targets this year would rise from around 50 previously expected to around 150, an increase of about 100. Depending on factors such as share consolidations of penny stocks, the number could reach as many as 220, according to the forecast.
