Delisting Procedures for Market Cap Shortfalls Fully Suspended

The delisting of companies that fall below the minimum market capitalization requirement has been fully suspended. On the 7th, the Korea Exchange decided, in light of the court's injunction ruling, to maintain the surveillance designation for companies failing to meet the market cap threshold, but to suspend the subsequent delisting procedures.

On the 2nd, the Seoul Southern District Court granted the applications by KOSPI-listed Jooyontech and KOSDAQ-listed KM Pharma to stay the effect of their delisting decisions, ruling that moving up the implementation of the raised market cap threshold from January next year to July of this year violated the principle of proportionality and predictability. The court only stayed the effect of the delisting decisions, leaving the surveillance designations themselves intact. Accordingly, the exchange will continue the surveillance designations for companies that fell short of the market cap standard, which took effect on July 1, but will not proceed with the follow-up delisting procedures that would normally follow such designations, having halted them on the 2nd and now suspending them going forward.

Eight companies that were already ordered delisted for falling below the market cap requirement and had trading suspended before October 2 will remain under trading suspension. They are KOSDAQ-listed Silla Esgee, Gold & S, KM Pharma, Fintel, Sejin T&S, and AFW, along with KOSPI-listed Jooyontech and SHD.

The exchange plans to file an objection to the court's injunction ruling in order to reaffirm the necessity of the market cap-based delisting system and the procedural legitimacy of its implementation.