20% of Korean companies had a change in largest shareholder

According to the FSS on Monday, it has found that 501 companies of 2,384 companies listed on the stock market experienced a change in their largest shareholders from 2019 to 2021, 45 companies having their largest shareholder change three times.

FSS headquarters in Yeouido, Seoul. [JOONGANG ILBO]

Twenty percent of Korean companies had a change in their largest shareholder in the three years through the end of 2021, the Financial Supervisory Service (FSS) said Monday.

It also noted that this happens normally when a company is in some sort of trouble.

According to the FSS on Monday, 501 of the 2,384 companies listed on the stock market experienced a change in their largest shareholders from 2019 to 2021, 45 companies having their largest shareholder change three times.

Of the companies, 64.4 percent faced insolvency, 48.9 percent were shortlisted for possible delisting by the exchange, 15.6 percent were delisted and 28.9 percent had employees charged with misconduct or embezzlement.

By type of business, 65.7 percent were manufacturers and 31.5 percent were in services.

Of the companies changing shareholders three times, 64.4 percent reported net losses and 49 percent were being monitored by the exchange. On average, they increased paid-in capital or issued convertible bonds 4.8 times during the three-year period versus 1.1 times by all listed companies.

In changing the largest shareholders, a transfer contract was used 31.6 percent of the cases and third-party allotments 26.3 percent.

The ownership stake of the new largest shareholder averaged 27.5 percent.

The FSS said it will continue to closely monitor companies whose largest shareholders were changed frequently and list them as being high risk.

BY CHOI HYUN-JOO [lee.hojeong@joongang.co.kr]