[THE INVESTOR] Another Chinese company listed in Korea is on the verge of delisting after the country’s stock exchange operator decided to remove the company from the secondary KOSDAQ index.
The Korea Exchange on July 6 said its reviews board decided to delist China Haoran Recycling for violating disclosure duties. The decision follows the suspension of trading of the company’s shares in January for belated regulatory filings.
On Jan. 26, the recycling company said in a regulatory filing that its subsidiary was ordered to suspend business on Oct. 11 last year by Chinese tax authorities. Haoran has seven days to object to the KRX’s decision.
Once delisted, China Haoran will become the second Chinese firm to be removed from the KRX this year and 11th Chinese firm to leave the Korean market. Wanli International Holdings was booted from the local bourse on May 28 after its auditor refused to provide an audit opinion on its 2016 financial statement.
Korea Exchange headquarters
Listed in February 2010, China Haoran is a “first-generation” Chinese company here, whose shares were listed in Korea before 2011. Sixteen entities made their stock debut, but many of them were kicked out due to frequent irregularities such as fabricating disclosures and accounting fraud, which had also led to a negative perception of Chinese firms here.
Largely due to the disgraced first-generation firms, there were no IPOs by Chinese companies between 2012 and 2015. IPOs resumed in 2016, but a series of recent scandals have reignited concerns over their reliability. Last year, China Ocean Resources, which was the only Chinese firm listed on the nation’s main bourse KOSPI, was delisted for fabricating disclosures.
By Park Ga-young (email@example.com)