Four industrial companies -- Hyundai Engineering and Construction, Hyundai Steel, Daelim Industrial and Hyosung -- will be removed from a list of the top 150 businesses that enhance corporate transparency by the Korea Exchange, according to the nation’s sole securities exchange operator on Thursday.

Based on the latest evaluation of listed companies on their efforts in enhancing corporate transparency in environmental, social and corporate governance, the four firms will be excluded as of March 23, the KRX said, citing a report by its research unit Korea Corporate Governance Service.

Adopted since December 2015, the index on corporate transparency has become an important criteria next to the Exchange-Traded Fund. 

The KCCS downgraded Hyosung from level B to C after the prosecution indicted Chairman Cho Hyun-joon over charges of embezzlement and breach of trust as well as the company’s violation of accounting codes.

The environmental, social and corporate governance level of Hyundai E&C, a construction arm under Hyundai Motor Group, also fell from B to C due to the violation of accounting codes.

Regarding disputes on apartment construction and unfair trading practices, Daelim Industrial was also downgraded from B+ to B. Hyundai Steel, another affiliate of Hyundai Motor Group, also received B, one notch down from B+, for colluding on bidding prices and violating safety and health codes.

Other companies that saw declines in environmental, social and corporate governance include steel giant Posco and Hana Financial Group, but the two were not subject to elimination this time, a KRX official said. Until its next announcement, the index will have a total of 146 companies, he added. 

By Cho Chung-un (christory@heraldcorp.com)