Listed companies in South Korea will be required to disclose the progress of their new businesses from Friday under a revised disclosure form introduced by the financial watchdog.
The Financial Supervisory Service (FSS) on Wednesday unveiled measures to prevent companies that try to entice investors with advanced technologies as new businesses. The FSS will strengthen the disclosure requirement so that companies do not add new business purposes to their articles of association even if they are short of funds and lack technology just to lift up stock prices.
The FSS will implement a revision to disclosure standards from Friday, which will make it mandatory for listed companies to disclose the progress of their new business initiatives.
The measure comes as there were cases recently where unfair trading forces added new businesses to their corporate objectives without any substantial business entities in order to capitalize on the trend of themed stocks, such as batteries, artificial intelligence (AI), and robotics.
“Investors are highly interested in stocks related to batteries, AI, ChatGPT, and robotics, which are evaluated as new businesses for future growth,” said an unnamed FSS official. “As many as 105 listed companies have added these areas to their business objectives in the past year.”
Among the companies, 14 are listed on the main Kospi market and 91 on the secondary Kosdaq. By sector, batteries accounted for the largest number with 54 cases, according to the FSS....
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