Lee Chan-jin: SK hynix’s ‘Solidigm’ Listing Runs Afoul of Dual-Listing Rules; Awaiting Authoritative Interpretation

[Financial News] Lee Chan-jin, governor of the Financial Supervisory Service, said he believed SK hynix’s plan to list Solidigm on the U.S. stock market amounted to a dual listing. He said he was assessing the potential impact on existing shareholders while awaiting an authoritative interpretation.
At the parliamentary audit of the National Policy Committee on the 19th, Lee responded to a question about the listing of Solidigm, SK hynix’s U.S. subsidiary, saying, “We are continuing to monitor the situation, and both the Financial Services Commission and the Financial Supervisory Service have concluded that it runs afoul of the rules on dual listings.”
This was in response to Rep. Park Seong-hun of the People Power Party, who had pointed out that “SK hynix explained to the U.S. Securities and Exchange Commission (SEC) the negative impact that a subsidiary’s listing could have on its parent company’s share price, but has offered no explanation to domestic shareholders.”
Lee said, “We are examining the potential negative impact of Solidigm’s listing on existing shareholders,” adding, “We are waiting for an authoritative interpretation from the Financial Services Commission on whether Solidigm’s listing would be subject to a securities registration statement.”
Solidigm was established as SK hynix acquired Intel’s NAND and solid-state drive (SSD) business. It was recently reported that Solidigm had selected Goldman Sachs and Morgan Stanley as lead underwriters for its initial public offering (IPO) as it prepares to list on the U.S. stock market. This has prompted concerns in the market that the interests of the parent company’s existing shareholders could be harmed.
Recently, financial regulators have emphasized a policy of “prohibiting dual listings in principle while allowing exceptions,” with shareholder protection at its core. Lee’s remarks are understood to mean that the authorities consider Solidigm’s listing to violate the rules. However, because overseas subsidiaries are not reviewed by domestic exchanges, an authoritative interpretation appears to be underway on whether the listing falls within the scope of review.
After Rep. Park’s question, National Policy Committee Chair Yoo Dong-su emphasized, “This is a very important issue for SK hynix investors, so please share the relevant materials with committee members.” Lee added, “If there is an appropriate way to convey our concerns to SK hynix as well, we will do so.”
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