SEOUL -(Dow Jones)- Two South Korean companies may choose to delist from U.S. stock markets if the costs of maintaining their listings there rise sharply, said an official with the Financial Supervisory Service Monday, who declined to name the two companies.
"A survey showed that of the 15 companies listed in the U.S., two companies said they would consider delisting if their listing costs rise by more than 50%, " said Jeong Yong-Won, chief of the regulator's accounting supervisory department.
Currently, 15 South Korean companies are listed on the New York Stock Exchange (NYX) and the Nasdaq (NDAQ), and these include Posco (NYSE:PKX) (PKX), Korea Electric Power Corp. (NYSE:KEP) (KEP), SK Telecom (SKM), KT Corp. (NYSE:KTC) (KTC), Kookmin Bank (NYSE:KB) (KB), Shinhan Financial Group Co. (NYSE:SHG) (SHG), Woori Finance Holdings Co. (WF), LG.Philips LCD (LPL) , Hanarotelecom Inc. (HANA) and Webzen Inc. (NASDAQ-NMS:WZEN) (WZEN).
Fourteen of the companies have a market capitalization of more than $75 million. Gravity Co. (NASDAQ-NMS:GRVY) (GRVY), Widerthan Co. (NASDAQ-NMS:WTHN) (WTHN), Pixel Plus (PXPL) and Gmarket Inc. (NASDAQ-NMS:GMKT) (GMKT) are only listed in the U.S.
In August, the FSS surveyed South Korean companies listed in the U.S., amid rising concerns over Section 404 of the Sarbanes-Oxley Act.
The Sarbanes-Oxley Act, introduced in 2002, requires the management of U.S.- listed companies to annually evaluate the checks and balances in place to ensure the accuracy of financial reporting. The companies must also hire an independent auditor to assess internal controls.
Earlier this year, the U.S. Securities and Exchange Commission rejected requests to exempt small public companies from financial-control reporting.
"The remaining companies responded that they will maintain their listing as they believe they will benefit from the U.S. listing despite higher costs," said Jeong.
-By Kyong-Ae Choi, Dow Jones Newswires; 822-732-2165; kyong-ae.choi@ dowjones.com
-Edited by Rosalyn Lim
(END) Dow Jones Newswires 09-11-06 0441 Copyright (c) 2006 Dow Jones & Company, Inc.
