Truston Urges Taekwang Industrial to Clarify Involvement of Group Management Council

Disclosure Request on Management Council’s Establishment and Composition
Response Required Within 30 Days—Considering Shareholder Derivative Suit and Other Measures

Truston Asset Management, the second-largest shareholder of Taekwang Industrial, has publicly questioned whether the Taekwang Group Management Council was involved in major decision-making at Taekwang Industrial and has requested the company's board of directors to clarify the relevant details.

On September 3, a representative from Truston stated, "We have sent an open shareholder letter to the Taekwang Industrial board of directors and all its members, inquiring about the actual operation of the Taekwang Group Management Council and its influence on the company’s decision-making process."

"Corporate decisions should be centered on the board of directors"

Truston pointed out that while the management council is known to be a body where executives from various affiliates discuss group-wide issues, its establishment basis or operational structure is not specifically disclosed in Taekwang Industrial’s articles of incorporation or business reports.

The Truston representative added, "Even if coordination at the group level is necessary, the decision-making authority of each affiliate and the responsibility of its board of directors must be clearly separated," and said that the purpose is to verify the actual decision-making structure at Taekwang Industrial.

Truston requested disclosure of the management council’s official name, establishment grounds, membership, and the party responsible for covering costs. The company also asked whether Taekwang Industrial provides personnel or financial support to the council, and whether Lee Ho-jin, advisor to Taekwang Industrial, attends council meetings, receives reports on agenda items, or offers opinions.

Truston further inquired whether matters such as the acquisition of AK Holdings, Dong Sung Pharmaceutical, K Shipbuilding, and a hotel, issuance of exchangeable bonds, plans to increase corporate value, and strategies for conducting treasury stock transactions were discussed in the council prior to board deliberations. The company also requested disclosure regarding whether undisclosed material information is provided to the council and whether the council is involved in the appointment of executives.

"Discussions with external parties should be documented in the board minutes"

Truston has demanded implementation of internal control procedures that require any discussion or consultation with the management council or external parties to be officially recorded in the board minutes prior to submitting agenda items to the board. The company also stated that if Taekwang Industrial is providing personnel or financial support to the council, it should do so only through formal contracts and with board approval.

Additionally, Truston insisted that any plans for holding or disposing of treasury shares should be established directly by the Taekwang Industrial board of directors, and that specific details should be made public before the 2027 annual general meeting to gather shareholder feedback.

Furthermore, Truston asked the audit committee to clarify who was responsible for drafting and distributing the press release issued last year in the name of the "Taekwang Group PR Office," as well as the approval process. The company also asked about the outcome of the related audit and whether any recourse or compensation measures have been taken with regard to the 76 million won penalty imposed by the Korea Exchange.

A Truston representative said, "We have requested a response from the board of directors within 30 days from receipt of the letter," adding, "If sufficient explanations are not provided, we will consider exercising our rights to request an inspection and copying of accounting books, initiating a shareholder derivative suit, or calling for an extraordinary general meeting."

This content was produced with the assistance of AI translation services.