| Article 67 |
In any of the following circumstances, the FSC may reject an application for approval of an initial public offering filed under Article 42, paragraph 1 of the Act or Article 156-2 of the Company Act:
- The attesting CPA issues an adverse opinion or disclaimer of opinion in the audit report.
- The attesting CPA issues a qualified opinion in the audit report, and such qualified opinion has an impact on the fairness of presentation of the financial reports.
- The Case Review Form prepared by the issuer and reviewed by the attesting CPA reveal any violation of laws or regulations or the articles of incorporation, where the violation is serious.
- The applicant has failed to institute an internal control system including and adopt internal audit implementation rules and have them passed by the board of directors pursuant to the Regulations Governing Establishment of Internal Control Systems by Public Companies.
- Any of the following circumstances arise in the CPA project audit of the efficacy of the internal control system design or implementation:
- The audited company fails to provide a Statement regarding the efficacy of the internal control system design or implementation.
- The CPA report indicates material deficiencies in the design or implementation of the audited company's internal control system and failure to improve them, or the report is a disclaimer of opinion.
- Employee stock option certificates have previously been issued under Article 167-2 of the Company Act, but a concomitant initial public offering is not conducted for the certificates along with that for the stock.
- The FSC discovers a violation of laws or regulations, where the violation is serious.
Where conducting an initial public offering for privately placed straight corporate bonds under paragraph 6 of the preceding Article and 3 years have not elapsed since the delivery date of the privately placed straight corporate bonds, the FSC may reject the application.
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