[Alpha Biz= Kim Jisun] South Korea’s Financial Supervisory Service (FSS) took action on 130 cases of disclosure violations by listed and unlisted companies in 2023, up 14 cases from the previous year.


On February 11, the FSS announced that among the 130 cases, 66 were subject to severe penalties, including fines and restrictions on securities issuance, while 64 received warnings or other minor measures. A total of 68 companies were involved, including 18 listed firms and 50 unlisted firms.


The proportion of severe penalties increased significantly last year, rising from 12% in 2023 to 50% in 2024. This was largely due to stricter measures against companies that repeatedly failed to submit regular reports, with eight firms accounting for 42 cases. Severe penalties were applied to cases involving intentional or grossly negligent violations that had a significant market impact. These included 21 fines, one administrative penalty, and 44 restrictions on securities issuance. Companies that failed to submit required reports at least four times within two years faced heightened penalties.


Minor penalties, such as warnings and cautions, were imposed in cases where violations had a limited impact on the market.


By type of violation, 71 cases (54%) were related to periodic disclosure failures, including the non-submission, delayed submission, or misrepresentation of business reports. Event-driven disclosure violations, such as omissions in securities registration statements or small-scale public offering reports, accounted for 35 cases (27%), while 22 cases (16%) involved missing key details in convertible bond issuance disclosures.


Of the 68 penalized companies, 50 were unlisted firms, mostly smaller companies that lacked awareness of disclosure obligations, had insufficient knowledge of relevant laws, or faced a shortage of personnel handling disclosure duties. Among the 18 listed companies, 15 were listed on KOSDAQ, while three were listed on KOSPI. Many of these cases involved missing critical information in major event reports.

 

 

[ⓒ 알파경제. 무단전재-재배포 금지]