Press Coverage

On the 20th, a fire occurred at an automobile factory in Daedeok-gu, Daejeon, killing 14 employees. As nine deaths were discovered concentrated in a 2.5-story duplex space that was not on the drawings, suspicions of arbitrary structural changes or illegal expansion are being cited as one of the main causes of increased casualties. The legal community predicts that this disaster will lead to a legal battle over the business owner's failure to fulfill his safety management duties depending on the results of future investigations. In this regard, attorney Kim Hyeong-jin of the Daeryun Construction and Real Estate Group at Law Firm said, "If the suspicion of illegal expansion is confirmed to be true and the structure catches fire, “If a significant causal relationship with the expansion of human casualties, such as preventing evacuation, is recognized, it will be a key basis for holding the management responsible for heavy responsibility under the Severe Accident Punishment Act,” he said. “The fact that a space not on the drawings was operated itself could be an indicator that the safety and health management system was not properly established and implemented.” The following is a Q&A with Attorney Kim. - If large-scale casualties such as the Daejeon fire occur and violations of the law, such as negligence in safety management, are detected, the business owner must be What is the most fatal legal provision? ▲If a violation of the obligation to ensure safety and health is confirmed as a result of the investigation, the strongest punishment is Article 6 (Penalty Provisions) of the Serious Accident Punishment Act. According to this provision, if one or more deaths occur due to a violation of the obligation to ensure safety and health specified in Article 4, the business owner or manager is subject to a fixed-term prison sentence of more than one year or a fine of not more than 1 billion won. In this case, as the number of deaths reached 14, it seems difficult to avoid a prison sentence, and the corporation could also be fined up to 5 billion won under Article 7. - It is still under investigation, but if it is confirmed that a 2.5-story space that was not on the drawings was arbitrarily created, what provisions of the Building Act could be problematic? ▲ It is a violation of Articles 11 (building permit) and 108 (penalties) of the Building Act. Extensions that increase the floor area of ​​a building must obtain permission from the local government. Anyone who violates this rule and builds a duplex arbitrarily will be subject to imprisonment for up to 3 years or a fine of up to 500 million won. In particular, in the case of the court, immediately after a number of casualties occur, as in this case, apart from the administrative corrective order, the investigative agency also proceeds with a judgment on criminal liability. - Even if the illegal expansion was not the cause of the fire, can the fire be held responsible for the spread of damage due to 'duty-related negligence'? ▲ Yes. Article 268 of the Criminal Act (Occupational Negligence Manslaughter) stipulates that a person who causes death due to professional negligence shall be punished by imprisonment for up to 5 years or by a fine not exceeding 20 million won. If it turns out to be true that the windows on the floor suspected of being illegal were narrow and the external passage was limited, this becomes a key element in proving the causal relationship between the negligence of the business owner and the death. In other words, if the structure in question was legal and the employees were able to evacuate, there is a higher possibility that liability for occupational negligence manslaughter will be recognized. -How are violations related to firefighting facilities, such as oil vapor and sandwich panel structures in the factory, handled? ▲Whether or not the Fire Prevention Act (Fire Prevention and Safety Management Act) has been violated is considered. Due to the nature of the process, even though there are many combustible materials, if firefighting facilities such as sprinklers are not properly maintained and managed, you are subject to severe punishment. In particular, since there is a high possibility that spaces suspected of illegal expansion are not equipped with legal fire-fighting facilities, this may lead to separate criminal punishment through a special investigation by the National Fire Agency. -Legal guidance that management currently operating old factories or shopping malls should use this disaster as a lesson to check. ▲It is too late after an accident occurs. First of all, risk factors such as fire risk processes must be blocked in advance through risk assessment, etc., and a thorough investigation must be conducted to determine whether the floor plan on the building register matches the actual space in use. If there is a duplex or temporary building that is not on the drawings, it must be demolished immediately or consult a legal expert to determine whether it was a legal procedure. In addition, the only way to minimize legal risks is to check whether firefighting facilities are being obscured by illegal structures and causing ‘visual and functional impairment.’ Reporter Kwon Byeong-seok (bsk730@fnnews.com)[View full article] ‘2.5 floors’ with many dead… The cost of customary ‘illegal expansion’ seen in the Daejeon disaster (link)

Supreme Court's first ruling, "Legaltech's legal document writing does not conflict with the current law." This ruling goes beyond the plaintiff's company's victory and heralds a counterproductive change in the legal market. “Bar associations should also break away from regulations and begin full-scale discussions on how to use AI.” A meaningful final ruling has been made that will change the landscape of the domestic legaltech (legal technology) industry. The Supreme Court recently confirmed a ruling in favor of the plaintiff in the appeal trial of a lawsuit filed by Park Seong-jae, head of Loform Legal AI Center, against the Seoul Bar Association requesting cancellation of disallowance for concurrent employment. This is the Supreme Court's first ruling that the ‘automatic legal document creation service’ provided by LegalTech does not violate the current law. The issue in this ruling was whether the service constitutes ‘handling of legal affairs by non-lawyers’, which is strictly prohibited by the Attorney General Act. In response to this, the Supreme Court considered the system in which documents are automatically completed when users enter information as legal. The idea is that if the structure is such that only documents are created mechanically without the involvement of a lawyer's individual review or revision process, this cannot be considered legal work. Accordingly, Legal Tech is expected to quickly dominate the market for basic legal documents such as content certification, complaints, and payment orders in the future. This ruling goes beyond just one company's victory and suggests that the introduction of AI technology in the legal market is an unavoidable trend of the times. The clock in the global market is already turning quickly through ‘generative AI’ beyond simple document automation. According to a survey by global consulting firm FTI, the proportion of corporate legal teams around the world adopting generative AI has nearly doubled from 44% last year to 87% this year. The paradigm of the legal market has already begun an irreversible change. AI will be responsible for standardized tasks such as drafting basic documents and searching for extensive precedents, while lawyers will focus on advanced legal interpretation, coordination of complex interests, and establishment of detailed trial strategies. Disputes with lawyer groups over LegalTech services have continued for over 10 years. It is expected that the Korean Bar Association's regulations, which have been in conflict over the legal tech issue, will also gain some breathing space. Daeryun, a law firm to which the author belongs, has paid attention to the potential of AI technology from an early age and has been gradually introducing related systems throughout its practice. By using AI technology for simple repetitive tasks, the work structure has been improved so that lawyers can focus on essential legal service capabilities such as analysis of key issues in a case and risk management. Rather than being a threat to lawyers' jobs, AI and legal tech are powerful means of improving the quality and accessibility of legal services. Now, the legal community should not stop at blocking technological development, but start discussing in earnest how to control and utilize AI. As the first milestone has been set by the Supreme Court's ruling, it is time to establish guidelines to establish legal tech in practice.[View full article] [Contribution] Will the release of Legal Tech be a signal for innovation in legal services? (Click here)

“An inevitable choice in the midst of a transaction suspension crisis” VS “Profit was stolen”… Former executives of a cosmetics company who were accused of breach of trust worth hundreds of millions of won after being accused of breach of trust worth hundreds of millions of won due to conflicting claims from both sides, were non-transferred by the police. The Yongin Western Police Station in Gyeonggi Province announced on the 24th that it had decided to non-transfer two people, including A, a man in his 50s, who was suspected of breach of trust and obstruction of business, with ‘no charges’ in January. He is accused of establishing a separate corporation while working and stealing the company's profits by swindling existing buyers. In addition, allegations were made of interfering with information processing by deleting thousands of business files stored in the company's cloud. In response, Mr. A completely denied the charges. As the transaction between the existing company and the buyer was in danger of being completely halted, the position was that the contract was inevitably continued through a new corporation in order to maintain profits. It was claimed that the deleted files were also private videos or duplicate data where the originals were stored separately, and there was no intention to intentionally interfere with the company's operations. The police judged that it was difficult to acknowledge intentional breach of trust based on the complainant's claims alone. The cause of the suspension of existing transactions has not been clearly proven, and there is room for the actions of Mr. A and others to be seen as measures to prevent losses to the company. Attorney Seo Bong-ha of Daeryun Law Firm, who represented Mr. A and others, said, "On the surface, it was a situation where a partner could have created a separate company and deleted the files, which could have caused misunderstanding, but behind the scenes, there was a legitimate reason to prevent losses to the company." “We were able to successfully defend ourselves,” he said. Intern reporter Heo Now rightnow@kyeonggi.com[View full article] Suspicion of “establishing a corporation and stealing from business partners”… Sued for hundreds of millions of won in breach of trust, police say 'not guilty' (Shortcut)

A, a woman in her 60s living in Ulsan, recently requested assistance for her mother, who is suffering from dementia, saying that her daily life is being controlled by her older brother, B. According to Mr. A, Mr. B is known to have imprisoned his mother by removing the rice cooker and locking the door. Accordingly, when Mr. A tried to move his mother's residence, Mr. B arbitrarily transferred his mother to a nursing hospital. Mr. A requested help from the police to find the nursing hospital where his mother was transferred, but did not receive help in locating her location due to a “family dispute.” Accordingly, Mr. A referred the case to this center. Accordingly, a list of nursing hospitals was quickly constructed using public data and medical institution registration information in the Ulsan and Busan areas, and primary filtering was performed based on objective indicators such as hospital bed size and medical treatment. Next, the subject's past movement history and health status were comprehensively analyzed to establish multiple hypotheses such as 'accessible distance', 'receiving environment', and 'point of hospitalization', and hospitals with a high probability of actual hospitalization were compressed step by step. As a result of organically combining these scattered clues, the hospital where the mother was staying was finally identified within just one hour of receiving the request. Mr. A, who confirmed his mother's survival and location, said that he was heartbroken because he was worried about how his mother would fare as she was old and unable to do anything for herself. He was at a loss because he could not get help even when he reported it to the police, but he was heartbroken, saying that he was able to find her quickly. This case shows that the role of private legal services in domestic and civil disputes is expanding beyond court arguments to identifying the substance of the case and resolving the crisis. It is a similar trend to large English-speaking law firms operating their own investigation teams from the beginning of a case to secure key information. In cases such as domestic affairs where it is difficult for investigative agencies to intervene immediately, quick confirmation of the facts is the most important step in resolving the problem. In the future, online investigation (OSINT) know-how and rapid on-site response capabilities are expected to play a big role in redressing clients' rights. (Daeryun Law Firm Evidence Investigation Center Director Choi Seong-moon)[View full article] Mother disappears amid suspicion of elder abuse... Circumstances discovered through a law firm [Column by Center Director Choi Seong-moon] (Shortcut)

A nursing home worker who resigned even though he immediately reversed his intention after sending a text message expressing his intention to resign won the administrative lawsuit filed against the company. On the 13th of last month, the 11th Division of the Seoul Administrative Court ruled in favor of the plaintiff in the lawsuit filed by A, a 60-year-old care worker, against the Chairman of the Central Labor Relations Commission to cancel the unfair dismissal sanctions judgment. Last year, A said to the nursing facility, 'I will only work until the end of this month, so please process my resignation.' I sent a text message. However, tens of minutes later, I withheld my position, saying, 'I will think about it,' and later, as time passed, I reversed my intention, saying, 'Please withdraw my resignation.' However, the management refused to withdraw his resignation, saying that Mr. A had already expressed his intention to leave the company and that it had advertised job openings and hired new personnel accordingly. Accordingly, Mr. A applied to the Local Labor Relations Commission for relief from unfair dismissal. The Jino Committee said that even though the expression of intention to resign was legally withdrawn, the management unilaterally refused to withdraw his resignation. Mr. A ruled in favor of terminating the employment contract, saying that there was no justifiable reason and that it was unfair dismissal in violation of the obligation to notify in writing. However, the result was overturned in the subsequent retrial of the Central Labor Relations Commission. The Central Labor Relations Commission interpreted Mr. A's text message as a 'notice of termination', a unilateral notice, and ruled that it was not an unfair dismissal. It ruled that the worker could not arbitrarily withdraw his intention to resign once it had reached the management. Ultimately, Mr. A disagreed with this ruling and filed an administrative lawsuit in court. The court ruled in favor of Mr. A. The court ruled, "According to the in-house employment contract and employment rules of the relevant nursing facility, workers need to request the employer to accept the employee's compensation in order to avoid liability for damages that would arise in the event of unilateral resignation," and "It is reasonable to view the expression requesting processing of the resignation as an offer to terminate by agreement requesting acceptance of the resignation." At the same time, "Until Mr. A sent the message that he would withdraw the resignation, he received an expression of approval from the management." “There is no truth,” he said, adding, “The fact that the company posted a job advertisement was only a measure to prepare for the shortage of manpower, and the termination of the employment contract agreement does not take effect unless the expression of intention to accept reaches the plaintiff.” Attorney Chang-min Jeong of the Daeryun Law Firm, who represented Mr. A, said, “According to the Supreme Court ruling, an employee can freely withdraw his/her expression of intention to resign until the employer approves it based on the employee’s submission.” He added, “Mr. We did not receive it, and we were able to win the case by emphasizing that the company's internal action of posting a job advertisement could not lead to acceptance.”[View full article] I withdrew my intention to resign, but was I fired? Law: “Withdrawal is valid before the company’s approval” (Shortcut)

Briefings such as roadmap for reducing actual working hours and implementation of the Yellow Envelope Act Sharing global company-centered compensation trends and HR strategies Daeryun Law Firm successfully completed a seminar with the theme of ‘2026 Labor Policy Change Briefing and Foreign Company HR Trends and Compensation Strategies’. Daeryun announced on the 20th that it held a seminar jointly with the Korea Foreign Companies Association (KOFA) at Daeryun’s main office in Park One, Yeouido, Seoul on the 19th. This event is in line with the recent labor policy environment. It was designed to examine changes and the personnel and compensation strategies of global companies. Foreign company HR managers and corporate legal affairs officials attended and showed great interest in the contents of the seminar. The seminar consisted of two sessions. In the first session, Ko Seong-ho, Vice President of Air Lucid Korea, gave a presentation on the topic of ‘Salary increase rate outlook and global corporate compensation trends.’ Vice President Go emphasized the flow of compensation strategies and changes in the human resource management environment of global companies and explained why the overall corporate compensation system needs to be redesigned. In the second session, Attorney Bang In-tae and Daeryun gave a presentation on the topic of ‘2026 Labor Policy Changes.’ Attorney Bang conducted an in-depth analysis of the ‘Roadmap for Reduction of Actual Working Hours’ and ‘Major Changes in Employment and Labor Policy’ into two parts. In the first part of the presentation, he explained in detail the practical changes that the ‘Roadmap for Reduction of Actual Working Hours’ will bring to corporate sites. Attorney Bang mentioned the government's goal of reducing actual working hours to 1,708 hours, the OECD average, by 2030, and emphasized that companies should reexamine their actual working hour recording and management systems in preparation for the planning and supervision of comprehensive wage abuse that has been in effect since the end of February. In Part 2, under the theme of 'Major changes in employment and labor policies in 2026,' he analyzed what future impact it will have on the personnel system and overall labor-management relations. Attorney Bang first explained the work-family balance policy, which has been in effect since January of this year, including support for the 10 o'clock attendance system during the childcare period and an increase in subsidy for substitute workers. He then mentioned the need to reorganize the wage system following the application of the minimum wage this year. In particular, attendees showed great interest in an in-depth analysis of the revised labor union law that went into effect in March. Attorney Bang said, “The key is to change the user-defined regulations in which the employer is viewed as an employer when he or she is able to control and determine working conditions in a practical and specific way even if he or she is not a party to the labor contract. As the negotiation structure between primary and subcontractors expands, the company’s labor risk management system needs to be redesigned from the beginning.” Kim Kook-il, CEO of Daeryun Management, said, “Labor policy changes are expanding to a level that affects the overall corporate management,” and added, “This seminar will help HR managers accurately understand the policy flow and establish practical response strategies.” “I hope it will be helpful,” he said. Meanwhile, Daeryun is supporting global companies and foreign companies seeking to enter the domestic market with ▲ employment contract review ▲ employment structure reform ▲ collective agreement ▲ response to labor disputes, etc. We also operate field-based advisory projects in cooperation with professional organizations. Reporter Kim Mi-ji unknown@kyeonggi.com[View full article] Daeryun, ‘2026 Labor Policy’ seminar successfully completed… “Inspection of Corporate Personnel and Compensation Strategy” (Shortcut)

Establishment of customized legal solutions according to new business promotion... All-round cooperation including contract review Daeryun “We will support stable business operations based on Daeryun’s unique expertise” Daeryun Law Firm announced on the 20th that it has signed an MOU with Daeryun Industrial Co., Ltd. and decided to join forces to strengthen corporate management stability and prevent legal disputes. At the signing ceremony held at Daeryun Industrial Co., Ltd.’s conference room on the 12th, CEO Kim Kuk-il, lawyer Ha-neul Lee, and Daeryun Industrial Co., Ltd. CEO Lee Joo-hyeop attended. Daeryun Industrial Co., Ltd. Established in 1994, it is an exhaust fan and blower manufacturing company that produces a variety of products ranging from home bathroom exhaust fans to industrial exhaust fans used inside large air conditioners. Based on the domestic market, it is conducting transactions with a number of countries and is solidifying its position in the domestic and overseas industrial sites and ventilation system markets. Through this MOU, Daeryun plans to provide customized legal solutions to minimize legal risks that may arise during the business expansion and management of Daeryun Industries and establish a stable business environment. Specifically, ▲ legal advice on corporate operation and contracts ▲ response to import/export and customs issues ▲ conflict prevention and risk management ▲ domestic and overseas business expansion-related We plan to promote cooperation in various fields, including advisory ▲ regional-based corporate support cooperation. Furthermore, based on the expertise and practical know-how of the construction and real estate group led by attorneys Park Jeong-gyu and Kim Hyeong-jin, Daeryun plans to provide one-stop advisory support from contract review to dispute resolution to prevent disputes that may arise during construction material transactions and construction. In particular, we decided to establish a customized strategy to prevent infringement of intellectual property rights and successfully lead the overseas patent application of products during joint projects with large corporations. Lee Joo-hyeop, CEO of Daeryun Industrial Co., Ltd., said, “As various legal difficulties exist in the current export/import and overseas transaction process, cooperation with a professional law firm is necessary.” He added, “We expect to be able to receive more systematic legal advice through this MOU.” Daeryun CEO Kim Kuk-il said, “We will proactively prepare for companies to manage legal risks in advance.” “It is important to establish a cooperation system,” he said, adding, “Based on Daeryun’s expertise, we will actively support Daeryun Industries to operate its business stably.” Meanwhile, Daeryun operates specialized centers in each field encompassing the entire corporate management, including corporate law, intellectual property rights, and taxation, and provides customized legal services to corporate customers through a close collaboration system of experts in each field, including lawyers, patent attorneys, tax accountants, and labor accountants. Reporter Jong-cheol Kim[View full article] Daeryun Law Firm and Daeryun Industrial Co., Ltd. signed an MOU... “Preemptively block legal disputes” (Shortcut)

Strengthening cooperation in corporate legal support, such as contract review and dispute prevention - Daeryun “Expanding practical legal support to stabilize the management of small and medium-sized businesses” Daeryun Law Firm announced on the 20th that it signed a business agreement (MOU) with Cookbank, a kitchen appliance and material wholesaler and supplier. At the signing ceremony held at Cookbank’s representative office located in Wanju-gun, Jeollabuk-do, key executives including Daeryun CEO Kim Kuk-il, lawyer Ha-neul Lee, and Cookbank CEO Jang Soon-moon attended. Cookbank last year Based on wholesale distribution for over 20 years, it is a small business that has expanded its business area from kitchenware to household glass, ceramics, wood, and metal materials. Recently, it has continued to grow through diversification of suppliers such as companies, government offices, schools, and hospitals, and conversion of its business structure to a B2B platform. Through this MOU, Daeryun plans to proactively check legal risks in Cookbank's business expansion and overall management and provide customized legal solutions. Major areas of cooperation include △distribution, wholesale and e-commerce legal advice △response to online sales and platform regulations △logistics and warehouse rental contract advice △intellectual property rights and brand protection △review of new distribution models. In addition, Daeryun negotiates contracts for overseas import and distribution of kitchen and interior materials based on the accumulated practical know-how of the construction and real estate group led by attorneys Park Jeong-gyu and Kim Hyeong-jin. Practical support, such as review and delivery risk inspection, and dispute prevention advice, will also be strengthened. In particular, in relation to contracts with Chinese clients and business expansion, we plan to increase our risk management capabilities through the assistance of Daeryun Chinese lawyers who are well-versed in local practice. Cookbank CEO Jang Soon-moon said, “When running a company, there are constant situations that require legal review, such as contract issues or dispute prevention,” and added, “Through cooperation with Daeryun, we expect to be able to systematically manage domestic and international legal risks that may arise in the overall distribution and e-commerce business and establish a more stable management foundation.” Daeryun CEO Kim Kuk-il said. “The importance of professional legal support is increasing in an industrial structure that combines physical distribution and e-commerce,” he said. “Through cooperation with Cookbank, we will provide specialized legal services in the distribution, e-commerce, and real estate fields.” Meanwhile, Daeryun provides professional legal services for all corporate activities, including corporate legal advice, compliance, contract review, and dispute response, and is expanding its cooperation network with companies in various industries. Global Epic CP Lee Soo-hwan / lsh@globalepic.co.kr Daeryun Law Firm – Cookbank Co., Ltd. MOU signed… “Corporate Dispute Prevention and Legal Advisory Cooperation” (Shortcut)

Demand for understanding the US federal priority principle and QMSR and integrated legal risk management The dawn of regulatory science innovation in 2026 The Korean Ministry of Food and Drug Safety's allocation of 11.4 billion won in the budget for ‘Food and Drug Regulatory Science Innovation Support’ in 2026 means that the domestic AI-based medical device and digital therapeutic device (DTx) industry has been promoted to a national strategic export item. This large-scale budget investment goes beyond simple financial support and contains a strong policy will to standardize the technical effectiveness of domestic companies in line with international legal standards. This heralds a major transformation of the industry. Now, companies must design a sophisticated legal roadmap that takes into account everything from the early stages of technology development to final licensing and health insurance fee registration. This will soon become a core competency directly related to survival in the global market. Regulatory response based on technical understanding Licensing of digital healthcare devices is fundamentally different from existing hardware-centered medical device screening. The process of proving the effectiveness of the algorithm and the continuous reliability of the data is essential. Through my expertise as a pharmacist, practical experience at a global pharmaceutical company, and public service experience at the Ministry of Health and Welfare and the Health Insurance Review and Assessment Service, I have experienced the entire process of innovative technology going through to settle in the market. Regulatory authorities focus on evaluating how the technology ensures ‘predictable safety’ within the current legal system rather than the innovation itself. Ultimately, the core of regulatory science is to explain complex scientific evidence in the language of laws and norms that authorities can accept. Translating technology into the language of law determines the success or failure of licensing. Legal seat belt for entering the U.S. market. The legal concept that companies targeting the U.S. market must understand is the principle of ‘Federal Preemption.’ The U.S. Supreme Court's Riegel v. Medtronic, Inc (2008) case presents important implications for medical device companies. At the time, the court ruled that patients can be restricted from filing product liability lawsuits based on state law for medical devices that have passed the U.S. Food and Drug Administration's (FDA) premarket approval (PMA) process. This shows that FDA approval goes beyond simple market entry permission and can be a legal shield that protects companies from the risk of large-scale civil litigation in the United States. Therefore, faithfully complying with the Quality System Regulation (QMSR), which will be fully implemented from 2026, is both a regulatory response and at the same time the strongest litigation defense strategy. Expansion of cyber security and product liability With the proliferation of software-based medical devices, security defects have emerged as a new product liability issue. Global regulatory authorities and courts tend to interpret security flaws in software medical devices not as simple technical errors but as serious manufacturing errors directly related to patient life. The FDA mandates the submission of a software bill of materials (SBOM) and the establishment of a post-security patch process in the QMSR system. If this is neglected, a chain of legal risks can arise that can lead to not only license cancellation but also violations of the False Claims Act. Companies must apply ‘Security by Design’ from the development stage. At the same time, a documentation system must be established to legally prove the design and management process. Transparency demands and administrative response strategies In Korea, the HIRA is closely examining expenditure reports through advanced data analysis techniques. The level of transparency demanded by companies is continuously increasing. Looking back at past precedents related to the Ministry of Health and Welfare's decision to reduce drug prices or invalidate public notices, companies that failed to logically prove the ‘academic justification’ for providing economic benefits in the early stages of administrative investigations suffered a huge management blow. In particular, digital healthcare companies must integrate and manage data to prevent marketing activities from being mistaken for rebates. When expanding overseas, global compliance standards must be established that simultaneously meet Korea's expenditure report system and the U.S. Physician Payments Sunshine Act. Integrated risk management creates leading companies. The success of the AI ​​and digital healthcare industries is not achieved through technological innovation alone. It must be accompanied by a solid legal defense mechanism to protect the technology and make it sustainable. Regulatory response, quality management, cybersecurity, and transparency should not be separate tasks but integrated into one strategy. We hope that the domestic medical device industry will lead global standards through preemptive regulatory strategies and institutional preparations commensurate with technological innovation.[View full article] “AI medical devices and DTx, legal response capabilities determine global survival” (Shortcut)

On the 12th of last month, the Financial Services Commission and the Korea Exchange announced a delisting reform plan to quickly and strictly eliminate insolvent companies. According to the exchange's simulation, the number of companies subject to KOSDAQ delisting this year is expected to increase significantly from around 50 companies originally expected to around 150 companies. As financial authorities' efforts to improve the market structure become fiercer, it is time for listed companies to face the impact this reform plan will have on their future survival and seek survival strategies. The most noteworthy change is the new requirement for delisting of 'coin stocks (stock price less than 1,000 won)' that will be established in July. If the stock price falls below 1,000 won for 30 consecutive trading days, it is first designated as a managed stock. The problem comes after that. If the price remains below 1,000 won for 45 consecutive trading days within 90 trading days after designation as a managed stock, it will be subject to final delisting review. This suggests that even if a company has normal business activities, it can be kicked out of the market at any time if it neglects stock price management. The outward-looking evaluation standards also become harsher. Starting in July of this year, the market capitalization standard for KOSDAQ-listed companies will be raised from 15 billion won to 20 billion won, and it is scheduled to be significantly strengthened to 30 billion won in January next year. What is more critical is that the ‘maximum improvement period’ given to a company in the event of delisting is shortened from 1.5 years to 1 year. Even the physical golden time for a company at risk of trading suspension to normalize its management has been greatly reduced. The standards for internal soundness and compliance have also become stricter. Previously, only complete capital erosion as of the end of the fiscal year was a requirement for delisting, but in the future, complete capital erosion on a 'semi-annual basis' will also be newly added as a substantive review requirement. The standards for expulsion for violations of public disclosure have also been significantly strengthened. Previously, in order to be eligible for listing eligibility, a company had to accumulate 15 penalty points over the past year, but now, if it accumulates only 10 points, it will be immediately put on the review board. Even a single serious and intentional violation can result in immediate expulsion. This is why detailed risk management by finance departments and public disclosure officers has become more important than ever. In the face of strengthening regulations in all directions, companies with low stock prices are considering stock mergers to increase unit prices. However, unreasonable mergers without improving fundamentals can actually be toxic, and if the stock price does not reach par value even after the merger, it is still subject to exit requirements. In the end, it is impossible to avoid the tight network of exchanges with tricks or short-term stopgap measures. Above all, the key to maintaining listing is ‘preemptive risk management.’ Available financial resources must be inspected in line with the changed requirements, and the internal control system must be thoroughly reorganized to prevent omission of disclosure. Preparing a detailed 'management improvement plan' that can logically persuade the exchange and following an objective explanation process is the most certain survival solution for listed companies to survive in this unprecedented wind of exits. Reporter Lee Dong-oh (canon35@mt.co.kr)[View full article] If you lose 1,000 won, you will be kicked out... What is the company's survival strategy amid all-round delisting pressure? (Shortcut)