“The KRW 2 Million Was an ‘Unlawful Share-Price Support’”: Truston Says It Began at Taekwang Industrial’s Request [fn Market Watch]

[Financial News]  The conflict between Taekwang Industrial and activist fund Truston Asset Management has escalated into a dispute over the facts surrounding an alleged demand for unlawful share-price support. After Taekwang Industrial took issue with Truston’s proposal for a tender offer to buy the company’s own shares at KRW 2 million per share, Truston directly rebutted the claim, saying the proposal was an alternative it reviewed at the company’s request.
According to investment banking industry sources on the 8th, Truston issued a correction statement saying that Taekwang Industrial’s allegations on the 4th—that it had demanded unlawful share-price support and obstructed business restructuring—were inconsistent with the facts.
The central issue is the “KRW 2 million tender offer for treasury shares” discussed last year.
Truston said it initially asked the company to buy back and cancel treasury shares. Taekwang Industrial’s management then requested an alternative, explaining that market purchases would be difficult because of low trading volume and that the company planned to use its treasury shares for mergers and acquisitions. Truston said it proposed a tender offer in response.
The KRW 2 million price was approximately 0.4 times the net asset value at the time. Truston said it was open to a third-party valuation if there were disagreements over the price. To avoid conflicts of interest, it emphasized that it would not participate in the tender offer or trade the shares beforehand.
Taekwang Industrial had previously filed a complaint with the Financial Supervisory Service in July last year, calling the proposal “greenmail” and an attempt to induce market-order violations. Truston, however, said it had not received any inquiries or contact from the Financial Supervisory Service regarding the matter for more than a year since then.
Truston also pushed back against the allegation that it had obstructed business restructuring. It said it had never opposed the acquisitions of Aekyung Industrial and Dongsung Pharmaceutical, and that it voted in favor at both shareholders’ meetings held in October 2025 and March this year, when the company added business purposes to facilitate the acquisitions.
Underlying the dispute between the two sides is Taekwang Industrial’s prolonged undervaluation. Truston argued that it is difficult to attribute the discount solely to industry conditions, noting that the company’s price-to-book ratio remained at 0.3 times even in 2021, when it posted KRW 353.9 billion in operating profit amid a petrochemical boom. It said a persistently low dividend payout ratio, 24.4% of treasury shares that had not been canceled, and substantial cash and cash-equivalent assets were among the factors behind the discount.
Meanwhile, the conflict could once again develop into an exercise of shareholder rights. In an open letter issued on the 3rd, Truston requested an explanation of the role of Taekwang Group’s management support consultative body and its major decision-making processes.
An investment banking industry official said, “The key issue in this controversy is not the KRW 2 million price itself, but how the tender-offer proposal came about and whether the demand was intended to benefit a particular shareholder. It is necessary to examine the shareholder letter issued at the time together with the actual voting records.”
A Truston official added, “Depending on the board’s response to the letter, we plan to decide whether to exercise shareholder rights, including requesting the convening of an extraordinary shareholders’ meeting.”

[email protected] Reporter Kim Kyung-a Reporter