Truston Rebuts TaekwangIndustrial’s Claims of “Illegal Demands to Inflate Stock Price and Obstruction of Business Restructuring”
Tender Offer Price of 2 Million Won, Just 0.4 Times the PBR at the Time
Considering the Exercise of Shareholder Rights, Such as Filing a Petition to Convene an Extraordinary General Meeting, Depending on the Board of Directors’ Response
[Edaily Reporter kyoungeun kim ] Truston Asset Management issued a rebuttal on the 8th, stating that the allegations made by TaekwangIndustrial(003240)—regarding illegal demands to inflate stock prices and obstruction of business restructuring—are untrue. In a press release issued that day, Trustone stated that certain details in the press release and statement distributed on the 4th differed from facts confirmed through regulatory filings and requested a correction. According to Truston, the controversial proposal for a public tender offer at 2 million won per share was a matter reviewed at the request of TaekwangIndustrial’s management at the time and was presented as an alternative to the proposal for a corporate value enhancement plan. The company added that the public tender offer price of 2 million won per share corresponded to a price-to-book ratio (PBR) of 0.4x, compared to the then-current PBR of 0.14x. TaekwangIndustrial claimed that this was an unreasonable and illegal demand to prop up the stock price. TaekwangIndustrial filed a complaint with the Financial Supervisory Service (FSS) on July 28 of last year. However, Truston stated that it has not received any request for cooperation in the investigation from the FSS even after a year has passed. Regarding the allegation of obstructing business restructuring, Truston emphasized that the only proposal it had opposed was the issuance of one type of exchangeable bond (EB) backed by treasury stock. Regarding the allegation of shifting responsibility for investment losses, Trustone stated that it had never demanded compensation for losses from TaekwangIndustrial. Truston further argued that even in 2021, when it posted an operating profit of 353.9 billion won, its price-to-book ratio (PBR) remained at just 0.3x, and that the subsequent four consecutive years of operating losses and 32 consecutive years of frozen dividends per share (1,750 won, dividend yield of 0.15%) should be viewed as the result of management decisions rather than industry conditions. Trustone also pointed out that TaekwangIndustrial itself had confirmed that the “Management Support Council” mentioned by the company is a body that does not appear in its articles of incorporation, business report, or corporate governance report. Trustone plans to determine the level of its response after reviewing the TaekwangIndustrial board of directors’ reply to the Seohan. A company official stated, “Depending on the content of the board’s reply, we plan to decide whether to exercise our shareholder rights, including filing a request to convene an extraordinary general meeting of shareholders.”
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