[Edaily Marketin JI YEONG-EUI Reporter] KOSDAQ-listed company SEOJIN SYSTEM CO., LTD(178320)belatedly reflected the fact that its Vietnamese subsidiary paid 1182억 won in taxes through a correction to its first-quarter report. Although the company had maintained the position that this was not subject to disclosure following related media reports, it only included the details of the tax assessment notice, payment, and the amount of the bank guarantee for late payment penalties in the corrected report after the Financial Supervisory Service (FSS) began verifying the facts and supervising the appropriateness of the disclosure.

Tax Assessment in February, Disclosure in June... SEOJIN SYSTEM CO., LTD Belatedly Amends First-Quarter Disclosure

According to the Financial Supervisory Service’s electronic disclosure system on the 26th, SEOJIN SYSTEM CO., LTD amended its first-quarter report the previous day and newly included “Matters concerning the payment of value-added tax and other taxes by its subsidiary, Seojin Vietnam.” The reason for the amendment was that the company had failed to disclose matters related to sanctions and other issues deemed necessary for investor protection.

According to the revised Q1 report, Seojin Vietnam, a subsidiary of SEOJIN SYSTEM CO., LTD, received a total of four notices of assessment for import value-added tax and other taxes from the General Department of Customs in Hanoi, Vietnam, between February 6 and May 18. The total amount of the assessment notices was 2.085635 trillion VND, equivalent to 118.256 billion KRW.

Seojin Vietnam paid the import VAT and other taxes in three installments between April 22 and May 20. On June 11, the company obtained a bank guarantee covering late payment penalties of 657.57 billion VND, equivalent to 38.007 billion KRW.

However, the company explained that regarding the portion of the payment—specifically the 1조7866억7100만동 (1조7866억7100만동) in VAT levied on ESS batteries supplied free of charge from 2021 to 2024, equivalent to 1013억400만원—it filed an objection with the Vietnamese tax authorities on April 22 in accordance with the Vietnamese Tax Administration Law and is currently proceeding with the relevant procedures.

Report Revised After FSS Intervention… Market Asks, “Did the Korea Exchange Fulfil Its Role?”

SEOJIN SYSTEM CO., LTD has continued to deny the need for disclosure even after an E-Daily report pointed out its failure to disclose the Vietnam tax risk. Related Article ☞ KOSDAQ-Listed Company with 5 Trillion Market Cap Hushes Up 100 Billion Tax Bomb [only-EDAILY]

In a notice posted on its website on June 5, SEOJIN SYSTEM CO., LTD described the matter as “an issue related to approximately 930억 won in value-added tax,” but also stated, “As an objection is currently being processed, the tax amount has not yet been finalized.” The company added, “After reviewing the matter in accordance with relevant laws and regulations, we determined that it does not constitute a matter subject to disclosure at this stage.”

However, after the Financial Supervisory Service (FSS) began verifying the facts regarding the appropriateness of the disclosure, SEOJIN SYSTEM CO., LTD revised its first-quarter report. The revised report reflected the facts regarding the tax assessment notice, actual payment, and bank guarantees for late payment penalties—contrary to the “tax audit stage” that the company had emphasized in its website notice. It is understood that the FSS, after requesting an explanation from SEOJIN SYSTEM CO., LTD regarding the tax risk of its Vietnamese subsidiary, also requested explanations from Shinhan Investment & Securities and Hana Securities, which had participated in the major shareholder’s fundraising before the risk was fully disclosed to the market.

Meanwhile, the market is criticizing the Korea Exchange (KRX) for failing to fulfill its role regarding SEOJIN SYSTEM CO., LTD’s belated correction of its disclosure. SEOJIN SYSTEM CO., LTD is a listed company with a history of being designated as a “company with inadequate disclosure” due to past instances of retracted and delayed disclosures, and as of June 12, it still had a cumulative total of 5 valid penalty points remaining. Given that financial authorities recently tightened the criteria for substantive delisting reviews due to disclosure violations—from a cumulative total of 15 penalty points over the past year to 10—some observers point out that if this incident had been deemed a disclosure violation within the existing penalty point validity period, the risk of a substantive review of the company’s eligibility for listing could have been raised.

An investment banking industry official pointed out, “If the Korea Exchange had scrutinized this matter properly, SEOJIN SYSTEM CO., LTD would have been subject to a delisting review due to the accumulation of penalty points for disclosure violations,” adding, “There are already calls to strengthen the soundness of the KOSDAQ market, yet the response has been complacent.”