More than 20 companies may be delisted for capital erosion or illegal activities including corruption, analysts here said Sunday, as the deadline approaches for audit reports.

According to the Korea Exchange, at least 22 firms, including 14 listed in the tech-heavy KOSDAQ market, may be delisted. Analysts say the number may increase following the March 31 deadline for the audit reports.

JS Cable, an affiliate of LS Group, is voluntarily seeking an exit as it has been suspended for supplying substandard cables for nuclear reactors under fake certificates that led to the shutdown of three nuclear reactors last year.

Tongyang Inc. and Tongyang Networks Corp., both affiliates of Tong Yang Group, whose chairman was indicted for financial crimes, are being reviewed for possible delisting on suspicion of misappropriation and embezzlement.

Trading for Byucksan Engineering & Construction Co., which is currently under court receivership, has been suspended since Feb. 5 for capital erosion.

"If the company fails to work out a solution for capital erosion before March 31, which is the deadline for annual business reports, it will fall under the criteria for delisting," an official from the Korea Exchange said, speaking on condition of anonymity.

Some eight other companies, including Ssangyong Engineering and Construction Co., are already subject to qualification reviews for impaired capital or irregularities by their management, such as embezzlement, according to officials.

"The number of firms facing delisting will likely increase after the companies submit their business and audit reports for 2013 at the end of next month," an official said, urging extra caution by investors. (Yonhap News)