[Edaily Reporter Kim Kyung-eun ] Truston Asset Management, the second-largest shareholder of TaekwangIndustrial(003240), has raised allegations that the Taekwang Group Management Council is interfering in the management of TaekwangIndustrial. The company claims that this group-level consultative body, which lacks legal standing, is involved in major decision-making outside the TaekwangIndustrial board of directors.

Trustone announced on the 3rd that it had sent an open Seohan to the TaekwangIndustrial board of directors and all directors, inquiring about the nature of the T. K. CORPORATION Management Council and its relationship with the company. It stated that if a sufficient explanation is not provided within 30 days, it will consider legal action, including convening an extraordinary general meeting of shareholders, filing a shareholder derivative suit, and filing a criminal complaint for obstruction of business.

Truston has raised concerns regarding the Management Council’s legal status and decision-making structure. According to Truston, although the Management Council is an organization that has influenced the group’s management for the past 12 years, it does not appear in T. K. CORPORATION’s articles of incorporation, business reports, or corporate governance reports. Truston described the Management Council—which is suspected of influencing T. K. CORPORATION’s major decisions outside the legal and disclosure frameworks—as a “ghost-like body.”

In particular, Trustone cited last year’s controversies surrounding TaekwangIndustrial’s large-scale new business ventures and exchangeable bonds (EBs) as evidence of the Management Council’s alleged intervention. This is because, in July of last year, TaekwangIndustrial’s 1.5 trillion won new business plan and EB issuance policy were announced via a press release issued in the name of the “T. K. CORPORATION Public Relations Office” prior to board approval or public disclosure, and the board was only notified afterward.

Trustone also argued that recent responses regarding TaekwangIndustrial’s shareholder return policy necessitate verification of whether the Management Council was involved. Last July, Trustone pointed out that TaekwangIndustrial’s average dividend payout ratio over the past 20 years was a mere 1% and demanded that it be raised to the average level for listed companies. In response, TaekwangIndustrial stated in a reply dated the 13th of last month that it would work toward increasing the per-share dividend for the 2026 fiscal year—to be paid in 2027—compared to the previous year. However, it did not specify a target figure, the extent of the increase, or the timeline for achieving it. Regarding treasury stock, the company offered only a general response, stating that it would establish a plan for the holding and disposal of treasury stock and seek approval at the 2027 Annual General Meeting of Shareholders.

A Trustone official pointed out, “For a company with an average dividend payout ratio of 1% over the past 20 years, a response stating only that it will ‘work toward an increase’ without providing a target figure is effectively meaningless,” adding, “The company repeated the same rhetoric across all three demands, avoiding firm commitments by omitting specific figures or deadlines and deferring decisions to the board of directors and the annual general meeting.”

They also cited cases of sanctions imposed on affiliates related to the Management Council. During last year’s regular inspection, the Financial Supervisory Service pointed out that HEUNGKUK METALTECH CO.,LTD. had provided personnel and funds to the Management Council at the group’s request without sufficient review. Two affiliated savings banks were fined approximately 2 billion won for providing 148 pieces of customer credit information to the Management Council without customer consent, and last month, the Seoul High Court ruled that the authorities’ sanctions were justified.

Trustone argued that this structure could undermine the independent decision-making of individual affiliates. Accordingly, Trustone submitted a public inquiry to the TaekwangIndustrial board of directors, requesting answers to 10 specific questions, including the exact name of the Management Council, the legal basis for its establishment, its composition and who bears the costs, whether Ho Jin Lee is involved in the Council, and which board agenda items over the past three years were reviewed in advance by the Council. It also demanded clarification on whether material non-public information was provided to the council and whether the council was involved in the appointment of the CEO and other executives.

Furthermore, Truston demanded that the legal basis for establishing the Management Consultative Council and its composition be disclosed in the business report and corporate governance report, and that if Advisor Ho Jin Lee wishes to be involved in management, he must be appointed as a registered director and assume responsibility, or else cease his involvement in management. Truston also proposed five measures, including that the Audit Committee independently investigate whether decisions are made through the Council and report the findings to shareholders, and that TaekwangIndustrial’s plans for holding and disposing of treasury stock be established by the Board of Directors rather than the Management Consultative Council.

Trustone has stated that it will escalate its response if TaekwangIndustrial refuses to reply or provides only a perfunctory response. The firm plans to consider requesting access to and copies of accounting records, requesting an audit of the Audit Committee, filing a shareholder derivative suit against responsible directors, and requesting the convening of an extraordinary general meeting of shareholders. It also left open the possibility of criminal action on charges of obstruction of business should the Management Consultative Council’s interference continue.

A Trustone official stated, “If a decision has been made, they must take responsibility; if they do not wish to take responsibility, they must step aside,” adding, “The TaekwangIndustrial board of directors must prove firsthand that it is not merely a rubber-stamp body for decisions devised by a shadow organization.”