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SEOUL, March 19 (Yonhap) -- A total of 19 companies listed on the South Korean stock market are likely to face delisting this year due to capital erosion or problems with their financial statements, the bourse operator said Tuesday.
Eight companies from the main bourse and 11 firms traded on the tech-heavy KOSDAQ market have been found to have negative capital or have received a disclaimer of opinion from auditors on their financial statements, according to the Korea Exchange (KRX).
A disclaimer of opinion is expressed when an auditor has not been able to obtain appropriate audit evidence and is unable to express an opinion on the financial statements.
Five shipping firms, including the Korea Line Corporation, were included in the list as the protracted economic slowdown weighed down on the industry, which led to capital erosions.
Lotte Tour Development, one of the leading South Korean land developers, was included as it is expected to face a cash crunch due to the collapse of an urban development project in Yongsan, located in the heart of Seoul.
Ssangyong Engineering & Construction Co., a troubled builder listed on the secondary market, may also be delisted as it suffers from capital erosion following massive losses for the second straight year in 2012.
Orient Pregen Inc, a local auto parts marker on the KOSDAQ market, is set to be automatically delisted as the firm posted an operating loss for the fifth consecutive year.
The KRX said more companies are likely to be delisted from the local stock market as companies are set to hand in their business reports by April 1. Last year, 72 companies were delisted from the main bourse or the secondary stock market.
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