FSS chief says Solidigm listing violates dual-listing rules; regulatory action uncertain

South Korea's financial authorities have determined that the planned US listing of Solidigm, a US subsidiary of SK hynix, violates domestic dual-listing rules — though whether those rules can actually be applied to a company listing overseas remains unresolved. Concerns are growing over the potential impact on SK hynix shareholders, and attention is now focused on whether regulators will take concrete action.

Financial Supervisory Service chief Lee Chan-jin said Monday at a national audit session of the National Assembly's Political Affairs Committee that authorities are closely watching the situation. "We are continuously monitoring the Solidigm issue," Lee said. "Both the FSC and the FSS have concluded that it falls under the dual-listing prohibition."

Dual listing refers to the separate stock market listing of a subsidiary controlled by a parent company. When a subsidiary lists independently, parent company shareholders may find that the subsidiary's growth value is not fully reflected in the parent's share price, or that investment returns become diluted.

Solidigm was established after SK hynix acquired Intel's NAND flash and solid-state drive business in 2021. As the company has accelerated preparations for a US listing, concerns have emerged that the move could conflict with the interests of existing SK hynix shareholders.

South Korea has established a regime that in principle prohibits dual listings to protect shareholders, allowing exceptions only in limited cases. However, because Solidigm is pursuing a listing on a US exchange, the central question is whether domestic rules can be applied at all. A finding that a listing constitutes dual listing and the ability to actually enforce regulations against it are separate matters.

Lee said the FSC is awaiting a legal interpretation on whether Solidigm would be subject to domestic securities disclosure requirements. "We will do as much as we can within the scope of appropriate measures," he said, adding that authorities would also convey their concerns to SK hynix "in an appropriate manner if that is possible."

Earlier that day, People Power Party lawmaker Park Sung-hoon said at the audit that SK hynix had disclosed to the US Securities and Exchange Commission the potential negative effects of the subsidiary's listing on the parent company's share price, while providing insufficient explanation to domestic shareholders on the same matter.