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New chief of Kosdaq committee vows to nurture ‘market of future’

‘Firms like Kakao or Celltrion might someday regret leaving the Kosdaq’

March 21, 2018 - 15:09 By Son Ji-hyoung
The newly appointed head of a committee for South Korea’s second-tier bourse Kosdaq vowed Wednesday to nurture the exchange into a “market of the future” and distinguish its role from that of the top-tier Kospi market.

“We will discover more small and mid-sized venture firms with high potential for growth and give them wider opportunities for initial public offerings,” said Khil Jae-uk, chairman of the Kosdaq Market Committee, at a press conference. 

Kosdaq Market Committee Chairman Khil Jae-uk. (The Korea Exchange)
The news conference was the first since a revision in February that allowed the Kosdaq Market Committee to be independent from the Korea Exchange, operator of the Kosdaq, ensuring the committee’s autonomy in the listing and delisting of firms on the tech-heavy market. The move aims to facilitate local venture firms’ listing procedure.

Khil also pledged to differentiate Kosdaq‘s market profile from that of the Kospi, whose listing procedure is under the stricter authority of the KRX led by Chairman Jung Ji-won.

“The Kosdaq’s high-risk and high-return profile should be different from that of the Kospi,” he said.

Securing the demand of investment and enhancing market confidence for investors is key to the Kosdaq’s quest to become a “market of the future” for “firms with innovative technologies,” he added.

This came about a week after Khil, a business administration professor at Hanyang University and outside director of Kiwoom Securities, was approved at an extraordinary shareholders meeting to chair the committee on March 13. As a nonstanding officer, Khil began chairing the nine-member committee that will comprise about half of two nine-member subcommittees in charge of IPOs and company audits.

Following measures unveiled by the Financial Services Commission in January, Khil pledged to streamline the listing process for firms whose high growth potential is overshadowed by other adverse factors for IPOs, establish a fund to invest in scale-ups and issue reports covering some 1,200 Kosdaq-listed firms.

“Firms like Kakao or Celltrion might someday regret leaving the Kosdaq,” he said, referring to those that transferred from the Kosdaq to Kospi last year.

Kosdaq Market CEO Jung Un-su (left) and Kosdaq Market Committee Chairman Khil Jae-uk. (The Korea Exchange)
Khil has long been a vocal critic against the Kosdaq operator’s lack of a long-term scheme to tackle tepid capital influx into the market. He was accompanied by Kosdaq CEO Jung Un-su at the press conference.

Jung, formerly an executive director and acting president of the Kosdaq market, had been recommended by the market committee led by Khil and was granted the shareholders’ greenlight Monday.

Since a revision came into effect in February this year, the Kosdaq Market Committee is authorized to list or delist a firm on the stock market, while a president and chief executive of the market will be in charge of market operations. Since 2014, the president of the Kosdaq market concurrently headed the committee, leaving the fate of Kosdaq-listed firms in the hands of the KRX.

By Son Ji-hyoung