Korea's FSC chief says Solidigm US listing falls under dual-listing rules

Lee Eog-weon (이억원), chairman of South Korea's Financial Services Commission, said on 22 October that a planned US listing of Solidigm, a unit of SK Hynix, falls under the current dual-listing rules. He said that, because of the ownership structure, SK Square and SK Hynix must carry out the five duties that parent companies have toward shareholders, according to Yonhap, Newsis and Kyunghyang Shinmun. [ 3 , 4 , 6 ]

Lee spoke at the National Assembly's Political Affairs Committee. Asked by People Power Party lawmaker Park Sung-hoon whether he agreed with the Financial Supervisory Service governor's view that a US listing counts as a dual listing, he answered: "Yes. It is subject to the dual-listing guidelines." Asked by Democratic Party lawmaker Lee Kang-il whether the rules apply to overseas listings, he said they apply to overseas and domestic listings alike. Yonhap and Kyunghyang Shinmun described the session as a comprehensive audit, while Newsis called it a regular audit. [ 3 , 4 , 6 ]

Under the rules, a parent company that wants an exception to the principle against dual listing must carry out five duties. Yonhap and Kyunghyang Shinmun list them as a shareholder impact assessment, a shareholder protection plan, communication with shareholders, a board vote for or against, and disclosure. Newsis said Lee called the duties "a very big obligation" and said he would keep watching. Chosun Ilbo's list differs in its details and includes a review by a special committee. [ 1 , 3 , 4 , 6 ]

Lee did not give a direct answer on whether Solidigm has to file a securities registration statement with Korean authorities. He said no listing has been officially announced and that there is nothing concrete yet. Chosun Ilbo reported that a registration review mainly checks the form and completeness of disclosure, and that whether it can be used to ban an overseas listing is a separate question. [ 1 , 3 , 4 , 6 ]

FSS governor Lee Chan-jin had said at a National Assembly audit on 19 October that both the FSC and the FSS judge the dual-listing rules to apply, and that he would pass concerns to SK Hynix if needed. Chosun Ilbo reported that the Korea Exchange told the office of lawmaker Ahn Cheol-soo that Solidigm counts as a subsidiary under the listing rules and that shareholder-protection duties apply. [ 1 , 3 , 6 ]

Chosun Ilbo wrote that SK Hynix is reviewing a Nasdaq listing of Solidigm and is considering Morgan Stanley and Goldman Sachs as lead managers. It cited a Reuters report of 25 September that an IPO could come as early as 2027 at a value of up to $150 billion. SK Hynix's position is that nothing has been officially decided. The paper wrote that failure to carry out the duties could bring a penalty of up to 1 billion won and a one-day halt in trading of SK Hynix shares, and that experts see the effect of legal sanctions as low while the verbal intervention could itself push for withdrawal. [ 1 ]