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This is a question regarding legal advisory on delisting.

Our company has recently become subject to a substantive review for delisting, on the ground that the Financial Supervisory Service received a report of accounting fraud and suspects intentional accounting misconduct. Since this is our first time facing such a matter, we would like to receive legal assistance on how to respond. We would be grateful if you could advise us on the delisting and provide legal advisory regarding the substantive delisting review, so that we can find a way out of this risk.

Delisting

Answer

Published: 2025-04-11

Author : Kuk Il KIM

If delisting is decided, a company may suffer significant loss of assets, so once it is selected as a candidate for delisting, it must prepare a response with the assistance of an attorney experienced in this area. The fact that delisting has been decided does not mean that the shares and securities themselves are extinguished, so private transactions between individuals remain possible over the counter.

However, because a decision to delist generally means that the listed company's management condition has, in most cases, deteriorated, the stock exchange may refuse to handle the securities in question.

As a result, investors holding the shares suffer serious losses and may claim damages against the company, so you should obtain specific legal consultation regarding the delisting.

Our firm continually analyzes the frequently amended delisting criteria. In addition, attorneys within our firm who hold accountant qualifications collaborate with accountants who have worked at large accounting firms to provide review and advice on audit results, advice on the process of business suspension and insolvency, advice on the results of capital impairment, verification of listing eligibility requirements, advice on the designation of stocks under listing management, representation in objections to delisting decisions based on formal requirements, and guidance on the substantive-review delisting procedure and advice on the selection of candidates, thereby assisting clients in escaping the risk of trading suspension and delisting.