My company has been designated as an administrative issue and is at risk of company sale. What should I do?

If designated as an administrative issue on the securities market, first trading is suspended and the stock is also prohibited from credit transactions.

Also, if there is a concern about being designated as an administrative issue, that fact is announced in advance, and if designated as an administrative issue, it can be publicly announced through electronic delivery media, etc.

While this only signifies risks related to stocks on the surface, it affects trust in business operations, so it can give a worrying image like company sale.

If designated as an administrative issue, since it can imply the risk of delisting, it is important to respond to the risk of leading to company sale thereafter.

To prepare for such situations, it is good to receive professional corporate counsel to prevent problems.

Representative requirements for designation as an administrative issue

- Failure to submit periodic reports: Failure to submit business reports, semi-annual reports, or quarterly reports by the legal deadline

- Failure to meet auditor opinion: Audit report qualified opinion, semi-annual audit report adverse or refusal of opinion

- Capital impairment: 50% or more of capital impaired

- Insufficient stock distribution: Less than 200 general shareholders or general shareholder ownership less than 5%

- Insufficient trading volume: Half-yearly monthly average trading volume less than 1% of floating stocks

- Insufficient sales: Less than 5 billion won in the most recent fiscal year

- Insufficient market capitalization: Market capitalization less than 5 billion won lasting 30 days

- Bankruptcy filing

- Application for commencement of rehabilitation proceedings

- Violation of disclosure obligations: Cumulative penalty points of 15 or more in a year

- In other cases where the exchange recognizes that designation as an administrative issue is necessary for the realization of public interest and investor protection