Korea's delisting drive faces court challenge as expulsions nearly double
The government's push to speed up the delisting of troubled companies is running into legal resistance, industry officials said Sunday. The challenges threaten to complicate efforts to improve the quality of the country's stock market after the number of firms removed from the Korea Exchange (KRX) nearly doubled this year. The Seoul Southern District Court recently granted injunctions sought by…
The South Korean government's effort to expedite the delisting of struggling companies is encountering legal challenges, industry experts have revealed. This development could hinder the enhancement of the nation's stock market, as the count of firms removed from the Korea Exchange (KRX) has nearly doubled this year. The Seoul Southern District Court recently granted injunctions requested by KOSPI-listed JooYonTech and Kosdaq-listed KM Pharmaceutical, halting the KRX from proceeding with their delistings.
Despite considering the defendants' circumstances, such as the potential delay in capital market reforms, the court emphasized the necessity of delisting, as it could negatively impact the plaintiffs' business operations and potentially endanger their survival. The KRX had already advanced the implementation of higher market-capitalization thresholds to July 2023, earlier than the initially planned January 2027 deadline.
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