[Alpha Biz= Ellie Kim] South Korea’s Financial Supervisory Service (FSS) said it will continue to request revisions to Hanwha Solutions’s securities registration statement related to its planned rights offering until sufficient information for investor decision-making is disclosed.

The move reflects the regulator’s intent to strictly address practices in which companies provide vague explanations regarding liquidity risks or the basis for earnings outlooks when raising capital.

Hwang Sun-oh, Senior Deputy Governor of the FSS, explained the rationale behind repeated revision requests during a briefing held on May 11 at the agency’s headquarters in Yeouido, Seoul.

“The company projected a significant improvement in future performance but failed to present concrete supporting evidence,” Hwang said. “It must clearly disclose to investors whether alternative financing options exist beyond the rights offering and what specific liquidity risks the company is currently facing.”

The FSS’s stance is seen as a reaffirmation of its review policy that places no limit on the number of revision requests if deemed necessary to protect investors during the examination of securities filings.

“We want to make it clear that if disclosures are judged to be insufficient, we have no choice but to request corrections,” Hwang added.

The regulator also issued a warning against companies that only formally reflect the intent of the revised Commercial Act in their disclosure documents.

According to the FSS, there have been cases where companies merely stated that they had established special committees in line with guidelines from the Ministry of Justice, without providing substantive details on measures to protect shareholder rights.

Going forward, the FSS plans to revise disclosure formats and enhance the infrastructure of the electronic disclosure system (DART) to improve the effectiveness of its review process.

 

 

[ⓒ 알파경제. 무단전재-재배포 금지]