Taekwang Industrial announced that it has filed a defamation and obstruction of business lawsuit against three executives from Trusstone Asset Management, including CEO Hwang Seong-taek and Lee Seong-won, on September 14. The lawsuit alleges that the defendants damaged the reputation of Taekwang Industrial and its directors through a shareholder letter containing false information, thereby obstructing normal business operations.
According to the lawsuit submitted by Taekwang Industrial, the defendants referred to the Taekwang Group's management council as a 'ghost-like organization' that influences group management in a public letter sent to the Taekwang Industrial board and its directors on September 3. They also disparaged the board as a mere formality that endorses the management council's decisions.
Taekwang Industrial categorically rejected these claims as false. It pointed out that the inter-company consultation body was renamed the Management Support Council in August of last year, and the management council no longer exists.
Taekwang Industrial explained that the Management Support Council was established solely to enhance cooperation and synergy among affiliates and does not serve as an organization that makes management-related decisions on behalf of the affiliates. A Taekwang Industrial representative stated, 'During the tenure of former Management Council Chairman Kim Gi-yu, the management council effectively acted as the group's control tower. Trusstone is misleading the current situation by portraying the council's past authority as if it were ongoing.'
Furthermore, Taekwang Industrial criticized Trusstone for presuming the involvement of the management council and the neglect of the board while pressuring directors with threats of actions such as requesting access to accounting records, shareholder representative lawsuits, and calling for extraordinary shareholder meetings. Taekwang Industrial asserted that these actions constitute interference with independent corporate activities and board functions through coercion.
The representative emphasized, 'Trusstone's unfounded claims and suspicions have repeatedly disrupted Taekwang Industrial's normal management decisions and investment activities. This behavior clearly exceeds the bounds of healthy shareholder rights.'
He added, 'Trusstone's abuse of shareholder rights ultimately causes significant harm to the company and the majority of ordinary shareholders, prompting us to take legal action.'
In response, Trusstone expressed immediate opposition, stating that Taekwang Industrial filed a criminal complaint without answering the inquiries raised in the public letter. Trusstone claimed that it had requested confirmation on ten items, including the basis for the establishment and composition of the management council and its involvement in Taekwang Industrial's decision-making, but had not received a response to date.
Trusstone particularly took issue with Taekwang Industrial's assertion during the lawsuit process that the management council effectively served as the group's control tower during Kim's tenure. Trusstone contended that if the management council was renamed the Management Support Council in August of last year, it implies that the management council existed for nearly two years after Kim was dismissed in August 2023.
Trusstone plans to cooperate with the investigation and intends to sequentially exercise its statutory shareholder rights, including access to accounting records, if it does not receive a response to its public letter by October 3.
Meanwhile, the conflict between Taekwang Industrial and its second-largest shareholder, Trusstone, has recently intensified. The dispute, which began over differences regarding shareholder return measures such as increased dividends and stock buybacks, has escalated into legal battles following the issuance of exchangeable bonds, raising governance issues related to the involvement in Taekwang Group's management.
* This article has been translated by AI.
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