Financial Services Commission Chairman Lee Eok-won said the planned U.S. initial public offering of Solidigm, a sub-subsidiary of SK hynix (000660.KS), constitutes a dual listing and that parent company boards must fulfill obligations rooted in their fiduciary duty to shareholders.
Speaking at a parliamentary audit held by the National Assembly's National Policy Committee on the 22nd, Lee responded to a question from Rep. Park Sung-hoon of the People Power Party about Solidigm's U.S. listing by saying that Solidigm "is subject to the dual listing guidelines." He added that "affiliates under a vertical ownership structure fall under the guidelines, so SK Square (402340.KS) and SK hynix, as parent companies, must carry out the five obligations grounded in their fiduciary duty to shareholders."
When Rep. Lee Kang-il of the Democratic Party of Korea argued that "overseas listings require tightly woven safeguards for domestic shareholders," the chairman stressed that "the five obligations based on fiduciary duty to shareholders that a parent company's board must fulfill are not minor obligations but very significant ones."
Earlier, on the 19th, Financial Supervisory Service Governor Lee Chan-jin also said the agency is "continuously monitoring the Solidigm issue" and would examine the dual listing question. The governor added that "if there is a way to convey our concerns to SK hynix in an appropriate manner, we will proceed."
Solidigm was launched in 2021 when SK hynix acquired Intel's NAND flash and solid-state drive business. The ownership chain runs from SK Inc. to SK Square to SK hynix to AI Company, a U.S. intermediate holding entity, and then to Solidigm. The company recently selected Goldman Sachs and Morgan Stanley as lead underwriters for the IPO and is reportedly considering a Nasdaq listing next year.
Analysts in the financial investment industry say the political and regulatory pressure reflects concerns that the Solidigm listing, coming amid controversy over credit risk tied to artificial intelligence, could add further downward pressure on the domestic stock market.