Summary:
SK Hynix has abandoned plans to list its subsidiary Solidigm in the United States after it faced strong opposition from shareholders and scrutiny from regulators for potentially harming the interests of minority shareholders. The South Korean chipmaker also suspended its pre-IPO financing process in conjunction with the listing plan, according to a regulatory filing on Friday.
SK Hynix's flash memory subsidiary Solidigm has previously selected Goldman Sachs and Morgan Stanley as the lead banks for a potential U.S. listing next year.
The decision was made due to concerns by South Korean regulators that the planned issuance may constitute a "duplicate listing", thereby diluting the rights and interests of existing shareholders. Lee Chan-jin, director of the Financial Supervisory Service, told lawmakers earlier this week that both the Financial Services Commission and the Financial Supervisory Service believe Solidigm falls within the scope of duplicate listing restrictions.
The controversy has become a test of Seoul’s efforts to strengthen corporate governance and protect the rights of minority shareholders as it seeks to address the country’s longstanding problem of undervalued stock prices, known as the “Korean discount.”
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