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It is predicted that the transaction suspension of Osstem Implant, which was subjected to a case of embezzlement worth 188 billion won, could last for more than two years.
The delisting of the KOSDAQ market is carried out in a three-trial system. The first step is to determine the subject of the listing eligibility substantive examination. Osstem Implant’s stock trading was suspended on the 3rd due to a substantive review of listing eligibility.
The Korea Exchange will decide whether or not Osstem Implant will be eligible for listing by the 24th. A decision must be made within 15 business days of the occurrence of the cause. However, if additional investigation is required, the review period may be extended within 15 business days.
If it is not subject to review, the transaction suspension is lifted. However, the industry believes that Osstem Implant will be difficult to avoid examination. If more than 5% of equity capital is embezzled or breached, a reason for examination occurs, because the amount of embezzlement exceeds 90% of equity capital in Osstem Implant.
Osstem Implant must submit a management improvement plan within 15 days if it is subject to substantive examination. The exchange must hold a corporate review committee (examination committee) within 20 business days from the date of submission of the improvement plan to deliberate on maintaining listing, delisting, and granting an improvement period.
However, since the committee has a structure in which a decision is made unanimously by seven members, several meetings are sometimes held.
When an improvement period is received, the transaction suspension is maintained for that period. The improvement period can be granted up to 12 months. Upon receiving the improvement period, the company must strive to maintain its listing while implementing the improvement plan submitted to the exchange. At the end of the improvement period, the committee will open again to deliberate on whether or not it should be closed.
Even if a decision is made by the trial committee, the result is not immediately confirmed. The KOSDAQ Market Committee, which corresponds to the third review, should be held to review and decide whether to trade or not. Even if a decision is made again here, if the company files an objection, it can be reviewed one more time.
If the KOSDAQ Market Committee receives an improvement period (up to 12 months), the suspension may not be resolved for up to 3 years.
Trading was suspended in May 2020, but Sillajen is still in the second stage of the investigation committee. Sillajen was given an improvement period of one year in November of that year after two committee meetings. The recent improvement period is over. On the 18th, the hearing committee to decide whether to close or not will be held again. Even if a decision is made on the ban, an objection can be filed once. If an objection is filed, the KOSDAQ Market Committee will review whether it is a trade-in or not.
Kolon TissueGene, which was suspended from trading in May 2019, has undergone two improvement periods and has been suspended for over 2 years and 6 months. On the 7th, after the recent improvement period ended, a statement of implementation of the improvement plan was submitted to the exchange. The exchange will hold a KOSDAQ market committee meeting on the 9th of next month to deliberate on the final delisting.
By Park Eui-myeong, staff reporter [email protected]
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