Taekwang Industrial, a textile and petrochemical subsidiary of Taekwang Group, has announced plans to take legal action against Trusstone Asset Management, which has raised allegations of management intervention and shareholder value destruction. The two parties continue to clash over issues related to Taekwang Industrial's stock price, share buybacks, exchangeable bond issuance, and investments in new businesses.
On September 4, Taekwang Industrial issued a statement regarding Trusstone's shareholder letter, asserting that "Trusstone is obstructing normal business activities and restructuring for future growth by making baseless allegations."
According to Taekwang Industrial, Trusstone reported acquiring a 5% stake in the company in June 2021, but as of the end of June this year, it holds only 1.3% after buying and selling shares. The initial purchase price per share is estimated to be around 900,000 won, and Trusstone is believed to have incurred a loss of approximately 2.5 billion won after selling about 17.5 billion won worth of shares at around 800,000 won each last year and this year.
Taekwang Industrial criticized Trusstone for blaming the company and its management for losses incurred due to an inability to predict the structural downturn in the petrochemical industry. The company expressed skepticism about Trusstone's repeated public letters, suggesting they may be a form of "noise marketing" to evade responsibility for investment failures and to enhance its recognition in the asset management market.
Taekwang Industrial explained that it is pursuing a business restructuring to secure new growth drivers, as relying solely on its existing petrochemical and textile business structure is insufficient for future growth. The company is also exploring investments and acquisitions in new sectors, including cosmetics, pharmaceuticals, and hotels, to expand its business scope into consumer goods, biotechnology, healthcare, and tourism.
Regarding Trusstone's demand last year for a public buyback of shares at 2 million won each when Taekwang Industrial's stock was trading in the 600,000 won range, Taekwang Industrial called it an "irrational demand". The company also noted that a court dismissed Trusstone's injunction against Taekwang Industrial's exchangeable bond issuance plan last year.
Taekwang Industrial stated, "Despite the court not accepting their claims and demands, Trusstone has once again raised unfounded allegations of management intervention through a management support committee in this shareholder letter. They must immediately cease this irresponsible behavior of raising suspicions without concrete evidence."
Taekwang Industrial described the role of the management support committee as a collaborative body aimed at enhancing synergy among affiliates, asserting that sharing information and capabilities among affiliates is a standard business practice during large-scale restructuring and new business initiatives.
The company emphasized that Trusstone's allegations are damaging its credibility and corporate value while obstructing normal business restructuring, and it has initiated legal reviews regarding Trusstone's claims and actions. Taekwang Industrial stated, "We will hold Trusstone legally accountable for any acts of disseminating false information and violations of capital market laws."
Meanwhile, Taekwang Industrial announced in August that it would invest 150 billion won to expand its modacrylic production line at its Ulsan plant, as part of its efforts to enhance its business portfolio.
* This article has been translated by AI.
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