South Korea’s financial regulator, the Financial Services Commission (FSC), announced Thursday its intention to implement necessary measures to ban “split listing” by domestic conglomerates, with an earliest effective date in July.
This controversial practice, also referred to as duplicate listing or spin-off listing, occurs when a core business division is spun off and then listed independently. The FSC identifies split listing as a primary contributor to the “Korea Discount,” a phenomenon where South Korean companies are often undervalued compared to their global counterparts.
The regulator further emphasized that this listing strategy has consistently undermined shareholder value, asserting its commitment to “in principle” prohibit the practice to safeguard investor interests.
The FSC argued that imposing a ban could significantly enhance the market valuation of certain companies already listed, thereby improving overall market fairness.
FSC Chairman Lee Eog-weon firmly insisted that such a practice should be banned unless it demonstrably creates “new value” and ensures “equal benefits” for all shareholders, promoting equitable investment opportunities.
Speaking at a recent Seoul seminar on duplicate listing, Chairman Lee affirmed, “We will thoroughly assess how duplicate listing impacts shareholders and develop comprehensive measures to protect their interests and investments.”
The contentious split listing practice gained significant public scrutiny following the 2022 market debut of major battery producer LG Energy Solution, sparking widespread debate among investors and market participants.
