My company has been designated as an administrative issue and is facing the risk of a company sale; what should I do?

If a company is designated as an administrative issue on the securities market, first trading is suspended and credit transactions in the relevant stock are also prohibited.

In addition, where there is a concern that a company may be designated as an administrative issue, that fact is announced in advance, and if it is designated as an administrative issue, this may be publicly disclosed through electronic transmission media and the like.

On the surface this signifies only the risk related to the stock, but because it affects confidence in the business operation, it can give a worrying impression, like a company sale.

If a company is designated as an administrative issue, it may carry the implication that there is a risk of delisting, so it is important to subsequently address the risk that this could lead to a company sale.

To prepare for such a situation, it is advisable to receive professional corporate advisory to prevent problems.

Representative requirements for designation as an administrative issue

• Failure to submit periodic reports: failure to submit the business report, the semiannual report, or the quarterly report by the statutory submission deadline

• Failure to meet the auditor's opinion: a qualified opinion in the audit report, or an adverse opinion or disclaimer of opinion in the semiannual audit report

• Capital impairment: impairment of 50% or more of the capital

• Failure to meet stock dispersion: fewer than 200 ordinary shareholders, or an ordinary shareholder shareholding ratio of less than 5%

• Failure to meet trading volume: a semiannual monthly average trading volume of less than 1% of the floating shares

• Failure to meet sales: less than 5 billion won in the most recent business year

• Failure to meet market capitalization: a market capitalization of less than 5 billion won continuing for 30 days

• A petition for bankruptcy

• An application to commence rehabilitation proceedings

• Violation of disclosure obligations: cumulative penalty points of 15 or more over one year

• Any other case where the exchange recognizes that designation as an administrative issue is necessary for the realization of the public interest and the protection of investors

If you have further questions regarding a company sale, we recommend that you seek out a corporate legal affairs attorney at Daeryun, ranked 9th among law firms in the Republic of Korea (based on 2025 National Tax Service value-added tax filings).