[E-Daily Reporter Kim Kyung-eun ] Truston Asset Management announced on the 14th that it had sent an official Seohan to the management and independent board of directors of TaekwangIndustrial(003240), demanding a comprehensive review of the “2026 Corporate Value Enhancement (Value-Up) Plan.” The company formally requested that the dividend payout ratio be increased to 40% by 2030 and that a stock split of at least 5-for-1 or a bonus issue be implemented.

This Seohan was drafted to verify whether the independent board of directors—which is tasked with overseeing the major shareholders and management—is fulfilling its intended role. Truston has requested written responses from both management and the independent board within 30 days. The company plans to determine the level of follow-up action based on the results.

In Seohan, Truston publicly raised two questions with the independent board of directors: whether the independent board expressed any objections to or coordinated with management regarding the draft proposal during the formulation of the Value-Up Plan (dividends, share buybacks, and stock split) disclosed on June 30; and whether there was an in-depth discussion from an appropriate financial leverage perspective regarding management’s “debt-free management principle.”

Truston stated, “The role of the independent board of directors should not be limited to merely rubber-stamping management’s proposals,” and urged the company to provide written evidence that the “checks and balances” promised by the board on June 18 had actually been implemented.

Trustone directly refuted TaekwangIndustrial’s claim that its undervaluation was due to industry conditions and profitability. TaekwangIndustrial’s return on equity (ROE) stands at 2.1%, which is higher than the industry average (1.8%). Even in 2021, when profitability was at its peak (ROE of 8.7%), the price-to-book ratio (PBR) did not exceed 0.5x. The criticism is that the root cause of the undervaluation lies in the “absence of a shareholder policy,” as the company has frozen dividends for the past 32 years and failed to share profits with shareholders.

In particular, critics pointed out the “double standard” whereby the 10-year average dividend payout ratio for the three listed T. K. CORPORATION companies was a mere 1.3%, while that of the unlisted affiliates owned by the controlling shareholder’s family was 33%—a tenfold difference. Accordingly, they demanded a roadmap to gradually increase the dividend payout ratio, starting at 10% in 2026 and rising to 40%—the KOSPI average—by 2030.

They also criticized the board of directors for turning a blind eye to the lack of liquidity. TaekwangIndustrial’s actual free-float is approximately 230,000 shares, which is only about 1% of the KOSPI average. The average daily turnover rate is also less than 0.2%, amounting to just one-fifth of the KOSPI average (1.15%). Trustone urged an immediate stock split of at least 5-for-1 or a bonus share issuance.

Regarding the plan to use treasury shares (24.4%) as funding for mergers and acquisitions (M&A), Trustone dismissed it as “an excuse to avoid shareholder returns.” The reasoning is that, with the stock price at a PBR of 0.22, utilizing treasury shares is equivalent to issuing new shares at a price that is absurdly low relative to the company’s intrinsic value.

According to Trustone, TaekwangIndustrial has poured a total of 301.2 billion won into real estate-related ventures over the past two years, including the acquisition of the Dosan Park Building (20 billion won), the HEUNGKUK METALTECH CO.,LTD. headquarters (51.2 billion won), and the Courtyard by Marriott Namdaemun (50 billion won), as well as a loan to a real estate development company owned by the major shareholder’s children (180 billion won).

Trustone criticized the move, stating, “Spending 301.2 billion won in cash reserves recklessly on real estate while attempting to dilute shareholders’ stakes under the pretext of treasury stock worth a mere 250 billion won is an act that seriously undermines the value for existing shareholders.”

A Trustone official stated, “We will decide on the level of our follow-up response after reviewing the replies from management and the independent board of directors,” adding, “If the issue is not resolved, we will consider all possible measures, including convening an extraordinary general meeting of shareholders, and we do not rule out a legal review of whether the directors have fulfilled their fiduciary duties.”