Joint statement from three major organizations including the Venture Association... Proposal of ‘5 major policy tasks for capital market reform’
(Seoul = Yonhap News) Reporter Lee Sang-seo = Major domestic venture companies urged the financial authorities to postpone the introduction of the KOSDAQ promotion system and to establish exception standards for venture companies in the prohibition of duplicate listings.
It was also proposed to postpone implementation of the 'delisting reform plan', which was intended to quickly eliminate insolvent companies, on the grounds that it could cause a vicious cycle such as stigmatization of some companies and decline in stock prices.
The Venture Business Association, Korea Venture Capital Association, and Korea Startup Forum held a press conference at the Kensington Hotel in Yeouido on the 15th and requested 'five major policy tasks related to capital market reform' centered on these contents.
These groups argued that 'implementation of segmentation', which divides KOSDAQ into 'premium' and 'standard' and introduces a promotion system, could have the effect of solidifying ranking in the market and stigmatizing companies belonging to the standard as 'non-prime companies'.
Regarding the 'application of exceptions to the prohibition of multiple listings', it was believed that the standard should be comprehensively judged on whether the controlling shareholder is expropriating private interests or whether general shareholder protection measures are secured, rather than 'duplicate listing'. At the same time, it was explained that a separate screening track for venture companies and innovative growth companies and exception standards for national strategic industries and venture capital (VC) investment companies should be established.
Regarding the implementation of delisting requirements for so-called 'coin stocks' with a stock price of less than 1,000 won, he sympathized with the restoration of market trust through the elimination of insolvent companies, but pointed out that the future value of innovative companies should not be judged only by quantitative indicators such as market capitalization or stock price.
In particular, they urged that the application of the market capitalization standard of 30 billion won, scheduled for January 1 next year, be postponed and that phased application be re-discussed after sufficiently reviewing the market impact, damage to general shareholders, and the possibility of efforts by companies close to the standard through the communication council.
In addition, they requested that prior opinion collection and industry impact assessment be regularized through a permanent policy consultative body in which financial authorities, the Korea Exchange, the Ministry of SMEs and Startups, and the venture industry participate.
Concerns were also raised about the strengthening of screening and follow-up management standards for the 'Technology Special Listing' system, which is intended to provide technology companies that have not yet generated profits with the opportunity to enter the capital market.
These organizations suggested that, as excessively strengthened screening standards can delay corporate financing, it is necessary to establish industry-specific evaluation guidelines and standard due diligence scopes to ensure a balance between investor protection and financing for innovative companies.
Song Byeong-jun, head of the Venture Business Association, said, "The management and control perspective of traditional finance was excessively reflected without incorporating the characteristics of ventures and startups. We request that the system design be carefully reexamined and a policy consultative body in which both parties participate be launched to realize 'productive finance.'"
