Duksan Nepcorus and DTS passed the KOSDAQ preliminary listing review on the 20th after proactively complying with dual-listing regulation guidelines before enforcement. The Korea Exchange's KOSDAQ Market Division approved the applications following deliberation by the KOSDAQ Market Listing Committee. These are the first cases to reflect the dual-listing principle prohibition exception guidelines announced by financial authorities on the 6th. Duksan Nepcorus is a subsidiary of Duksan Hi-Metal, while DTS is a subsidiary of Dasan Networks. The companies voluntarily adopted regulatory requirements including shareholder approval processes despite the regulations not yet being in effect.
Korea Exchange Approves Preliminary Listing Applications on the 20th
According to the Korea Exchange on the 21st, the exchange approved the preliminary listing review for Duksan Nepcorus and DTS on the 20th. Financial authorities noted during the guideline announcement on the 6th that Duksan Hi-Metal "communicated with shareholders on its own, implemented voting along with shareholder protection measures and impact assessments" and "effectively fulfilled dual-listing standards."
Duksan Hi-Metal Shareholders Approved Subsidiary Listing in May
At Duksan Hi-Metal's extraordinary shareholders meeting in May, the subsidiary listing agenda passed with a 78% approval rate based on total issued shares with voting rights. The approval rate based on voting shares exercised reached 92.7%. The company also conducted assessments of the subsidiary listing's impact on parent company shareholders, business and management independence self-evaluation, and third-party institutional evaluation.
A Duksan Nepcorus representative stated, "We held an extraordinary shareholders meeting in May for proactive shareholder protection and voluntarily secured shareholder consent with overwhelming approval." According to financial investment industry sources, the companies faced uncertainty after the dual-listing prohibition principle was announced following their listing decision, but proceeded with proactive responses. Sources indicate the companies "made efforts to obtain maximum consent, including directly obtaining shareholder signatures."
Dasan Networks Conducted Shareholder Communication Last Month
Dasan Networks' board of directors proactively engaged with shareholders regarding subsidiary DTS's listing. The company conducted shareholder meetings, shareholder surveys, and parent company shareholder impact assessments. At Dasan Networks' extraordinary shareholders meeting last month, the subsidiary listing agenda passed with a 46.5% approval rate based on total issued shares with voting rights. The approval rate based on voting shares exercised was 90.3%.
Financial Authorities Established Five Obligations for Parent Companies
The Financial Services Commission and Korea Exchange announced exchange regulations and guidelines containing detailed standards for dual-listing principle prohibition exceptions. The regulations impose five obligations on parent company boards of directors for dual-listing: shareholder impact assessment, shareholder protection plan preparation, shareholder communication (or shareholder consent voting), board approval and opposition resolution and subsidiary notification, and disclosure.
The authorities apply a '3% rule' as the standard for recognizing shareholder consent. This method limits voting rights to 3% for shareholders (including largest shareholders) holding over 3% voting rights. Subsequently, approval requires either a majority of attending shares or consent from one-quarter of total voting rights. Financial authorities plan to implement the guidelines as early as the end of this month after deliberation at the Financial Services Commission's Securities and Futures Commission regular meeting.
FAQ
What did Duksan Nepcorus and DTS achieve on the 20th?
Duksan Nepcorus and DTS passed the KOSDAQ preliminary listing review on the 20th after the Korea Exchange's KOSDAQ Market Division approved their applications following committee deliberation. These are the first cases to proactively comply with dual-listing regulation guidelines announced on the 6th before the regulations took effect.
What approval rates did the parent companies receive at shareholder meetings?
At Duksan Hi-Metal's extraordinary shareholders meeting in May, the subsidiary listing agenda received 78% approval based on total issued shares with voting rights and 92.7% approval based on voting shares exercised. At Dasan Networks' extraordinary shareholders meeting last month, the agenda received 46.5% approval based on total issued shares and 90.3% approval based on voting shares exercised.
What is the '3% rule' for shareholder consent?
The '3% rule' limits voting rights to 3% for shareholders holding over 3% voting rights, including largest shareholders. After applying this limitation, approval requires either a majority of attending shares or consent from one-quarter of total voting rights. Financial authorities plan to implement these guidelines as early as the end of this month.
