Truston Seeks Access to Taekwang Industrial Board Minutes: "Who Really Makes the Decisions?"

From Bond Issuance to M&A Approval, Seeks to "Inspect Meeting Minutes"
Urges "Internal Audit" to Clarify Loans, Option Agreements, and Perks for Expert Committee Members

Truston Asset Management (hereinafter “Truston”), which holds a 5.04% stake in Taekwang Industrial, has requested to inspect and copy the company’s board meeting minutes and urged its Audit Committee to conduct an audit, saying it will uncover the substance of the company’s key decisions.

On October 13, a Truston representative said, “On September 3, we sent Taekwang Industrial an open letter regarding its management support council and requested a response, but received none. We will use the board meeting minutes and an audit to verify who makes key decisions and whether proper procedures were followed—matters that cannot be confirmed through disclosures alone.”

"Identifying Who Makes Investment and Personnel Decisions"

Truston first questioned who was responsible for appointing the CEO and making large-scale investment decisions. A Truston representative said, “From December 2023 through March 2025, all three announcements concerning the appointment of Taekwang Industrial’s CEO were made under the group’s name before board resolutions were passed. In the case of CEO Seong Hoe-yong, the group announced his appointment on December 17, 2023, and he was already listed as the ‘current CEO’ in the notice convening the shareholders’ meeting on March 12, 2024. It was not until March 29 that the shareholders’ meeting appointed him and the board selected him.”

Truston also raised concerns about the procedures for large-scale investments and fundraising. It said a press release issued under the group’s public relations office was distributed ahead of the disclosure of a KRW 1.5 trillion new-business investment plan in July 2025. A KRW 318.6 billion exchangeable bond (EB), approved without an underwriter, was withdrawn just five months later. Taekwang Industrial was designated an unfaithful disclosure company in connection with both cases and fined KRW 126 million. Truston also noted that T2 Private Equity’s participation in the bidding for Aekyung Industrial proceeded without prior board approval and was addressed only as a post-facto report.

Truston also focused on transactions with companies in which the children of the largest shareholder hold stakes. A Truston representative said, “The two children of former Chairman Lee Ho-jin each hold a 9% stake in T2 Private Equity, a co-investor in the acquisition of Aekyung Industrial, and Heungkuk REITs Management, which received KRW 101.2 billion in investment from Taekwang Industrial.” The representative added, “Then-outside director Kim Woo-jin requested a review of potential conflicts of interest when T2 Private Equity’s establishment was reported in December 2024, and opposed the share purchase agreement for Aekyung Industrial in October 2025 because of the co-investment structure.”

Advisory fees paid after the contract expired also came under scrutiny. Taekwang Industrial’s board approved a management advisory contract for former Chairman Lee, with annual fees capped at KRW 900 million, on October 23, 2024. The contract ended on October 31, 2025, but no approval of a renewal has been identified. Former Chairman Lee received KRW 850 million in 2025, and is still listed as an adviser in the company’s 2026 semiannual report. Truston called for an audit into whether advisory services were actually provided and how the fees were calculated.

Calls on Audit Committee to Respond in Writing Within 30 Days

Truston also raised suspicions that the Audit Committee had neglected its duties. It said the committee had never responded to any of Truston’s three audit requests: one in July 2023 concerning suspected improper support involving golf course memberships, one in August 2025 concerning the circumstances behind the company’s designation as an unfaithful disclosure company, and the open letter sent in September 2026.

Truston asked the Audit Committee to respond in writing within 30 days, specifying for each matter whether an audit would be initiated, its scope, the expected completion date, and how the findings would be reported to shareholders.

A Truston representative added, “This request and call to action are intended to verify facts that cannot be confirmed through disclosures alone, using procedures guaranteed to shareholders under the Commercial Act. We expect Taekwang Industrial’s board and Audit Committee to respond in good faith.”

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