In response to concerns that KOSDAQ-listed companies, including those listed under the technology exemption program, could suffer significant losses from no-capital mergers and acquisitions (M&A), Lee Chan-jin, head of the Financial Supervisory Service, stated on the 19th, “We are closely examining abnormal activities by no-capital M&A operators,” pledging to protect KOSDAQ-listed companies.
Park Min-gyu, a lawmaker from the Democratic Party of Korea, raised the issue of KOSDAQ companies facing delisting risks due to failing to meet market capitalization requirements during the National Assembly’s Political Affairs Committee audit of the Financial Supervisory Service held on the 19th at the National Assembly building in Yeouido, Seoul.
Park (Rep.) pointed out, “Since this year, there has been an increase in cases where some small and mid-sized listed companies that are struggling to meet listing maintenance conditions have moved to conduct capital increases, acquire other companies, or sell control of their businesses. The market is concerned that these companies may become victims of no-capital M&A or corporate raiders.” He added, “In fact, the number of cases in which financial authorities notified parties of unfair trading charges over the past five years stands at 354 for KOSDAQ-listed companies, compared to 136 for KOSPI-listed companies. Among these, 46 notifications were directed at companies listed under the technology exemption program.”
Park (Rep.) noted, “There are many cases in which companies acquired listed firms with no capital using bonds and other instruments, then weakened those firms through market manipulation and misappropriation of funds, causing enormous damage to minority shareholders.” He further pointed out, “The Financial Supervisory Service has previously conducted special investigations into suspected no-capital M&A companies, but there have been none for over a year since the end of May 2025.”
The argument is that, as KOSDAQ delisting criteria are being tightened, special investigations by the Financial Supervisory Service are necessary to protect companies at risk of delisting from unfair trading practices such as no-capital M&A and hostile takeovers.
In response, Lee stated, “In fact, we are currently conducting continuous monitoring in coordination with the Korea Exchange to check for any unusual matters or transactions.” He added, “Because there are groups of no-capital M&A operators, we are closely examining their abnormal activities.”
in STOCK
