Lee Eok-won: “Solidigm Also Subject to Duplicate-Listing Guidelines; Parent Companies Have a Duty to Protect Shareholders”

[Financial News] Financial Services Commission Chairman Lee Eok-won said the proposed listing of SK hynix’s U.S. grandchild subsidiary Solidigm is subject to the duplicate-listing guidelines. This came after Financial Supervisory Service Governor Lee Chan-jin judged Solidigm’s listing to constitute a duplicate listing on the 19th, with Chairman Lee once again confirming the authorities’ position that the guidelines apply.■ Lee Eok-won: “Solidigm Also Subject to Duplicate-Listing Rules”At a comprehensive audit by the National Assembly’s National Policy Committee on the 22nd of the FSC, the Financial Supervisory Service and other agencies, Chairman Lee answered a question from People Power Party lawmaker Park Seong-hun about whether the duplicate-listing guidelines apply to Solidigm’s U.S. listing, saying, “It is subject to the duplicate-listing rules.” He added that the guidelines “apply to affiliates under a vertical governance structure,” explaining that if Solidigm lists, parent companies such as SK Square and SK hynix, must fulfill five key shareholder-protection obligations. He added, however, that “there has been no official announcement of plans to list or any concrete details.”
Solidigm is a U.S. company established by SK hynix after it acquired Intel’s NAND and SSD (solid-state drive, a semiconductor-based storage device) business. Concerns have been raised that listing the grandchild subsidiary after the parent company could undermine the value of existing shareholders’ holdings. SK hynix says it is considering various options to strengthen its competitiveness, but that nothing has been decided regarding a listing.
At the Financial Supervisory Service’s parliamentary audit on the 19th, Governor Lee said that both the Financial Services Commission and the Financial Supervisory Service had concluded that a duplicate listing would run afoul of the rules, adding that they were examining the impact on existing shareholders.
Chairman Lee also responded to a question that day from Democratic Party of Korea lawmaker Lee Kang-il, emphasizing that “the rules state that they apply to both domestic and overseas listings,” and that parent companies’ shareholder-protection obligations therefore apply to overseas listings as well. In response to calls to strengthen safeguards because overseas listings are difficult to control directly, he said the parent company’s board must fulfill its duty of loyalty to shareholders and the five obligations under the guidelines, adding, “We’ll keep a close watch.”
Meanwhile, Chairman Lee and Governor Lee apologized again for the losses suffered by investors in single-stock leveraged exchange-traded funds (ETFs), saying they were “deeply troubled.” Chairman Lee said he would pay closer attention to investor protection and market stability, while Governor Lee said, “I feel deeply sorry to the public,” and said he would reflect on the supervisory body’s role and responsibilities.■ Reviewing Disclosure of the Loan Interest Rate Calculation ProcessThey also decided to consider disclosure measures to increase transparency in how banks determine loan interest rates. When National Policy Committee Chairman Yoo Dong-su argued that loan rates and the process for setting them should be made public to encourage competition among banks, Governor Lee said, “We are preparing measures, including disclosure, to strengthen consumer choice through a form of ‘naming and shaming’—publicly identifying and shaming them.” He also responded, “We will prepare,” to a request for a detailed review of the disclosure system.
Some also criticized banks for increasing borrowers’ burden by raising additional interest rates and cutting preferential rates. According to Democratic Party of Korea lawmaker Min Byeong-deok, BNK Kyongnam Bank’s additional interest rate rose from 3.06% in June to 3.67% in August, an increase of 0.61 percentage points, while preferential-rate benefits were also reduced. Jeju Bank likewise raised its additional interest rate while lowering its preferential rate. Min called for a joint special inspection by the FSC and the Financial Supervisory Service into additional interest rates.
[email protected] Lee Jeong-hwa, Park Mun-su Reporter