This article was published on Aug. 19, 2025, at 4:41 p.m. on the ChosunBiz MoneyMove site.
The government is pushing for the sale of equity in TKG Tae Kwang (hereinafter referred to as TKG Tae Kwang). This equity consists of the shares that the heirs of the late former chairman Park Yeon-cha, the founder of TKG Tae Kwang, paid for as inheritance tax. Since TKG Tae Kwang has a precedent of buying back its own shares each time the government sells its equity, it is highly likely to act as the buyer this time as well. However, there are criticisms that the company is burdening taxes that individuals should bear.
According to the investment banking (IB) industry on the 19th, the Korea Asset Management Corporation (KAMCO) is moving to sell 270,000 shares (2.83%) of TKG Tae Kwang owned by the Ministry of Economy and Finance. The minimum desired price per share from the sellers is 27,2036 won. The principle is to acquire the entire stake as a whole, and offers must exceed the estimated price of approximately 73.4 billion won.
This equity is part of the shares that were received from the heirs after the late chairman Park passed away in 2020. Earlier, after the passing of the former chairman, his wife, honorary chairwoman Shin Jeong-hwa, and their three daughters, Park Seon-young, Park Joo-young, and Park So-hyun, paid 354.3 billion won in inheritance tax on an 18.3% equity stake in TKG Tae Kwang. The payment price was approximately 171,460 won per share.
Eldest son Chairman Park Joo-hwan reduced the burden of paying inheritance tax through the installment payment system while retaining his stake in TKG Tae Kwang. This was to create a complete one-man system. Chairman Park also acquired some of the remaining stakes of the four daughters after paying the inheritance tax. The remaining stakes of the four daughters were acquired through TKG Tae Kwang buying back its own shares. As a result, Chairman Park is currently listed as the largest shareholder of TKG Tae Kwang (45.74%). The Ministry of Economy and Finance holds 12.19% of the equity.
TKG Tae Kwang has appeared each time the Ministry of Economy and Finance disposes of the shares received as payment. Over three occasions from 2022 to last year, the Ministry has sold equity in TKG Tae Kwang. Over three years, 590,379 shares of TKG Tae Kwang were disposed of, totaling 117.9 billion won. The entity that acquired this amount was TKG Tae Kwang.
Once again, TKG Tae Kwang is likely to emerge as the acquirer. Thanks to producing Nike products and profitable subsidiaries, it recorded a net profit of 348 billion won as of the end of last year. By the end of March this year, its retained earnings on a separate basis reached 1.75 trillion won. It is in a position to adequately buy back its own shares.
However, there are criticisms regarding the structure of the company absorbing the shares paid as inheritance tax with company funds. This structure effectively uses company funds to cover taxes that individuals should bear, and the way of buying back shares with company money could strengthen the owner's control. Currently, TKG Tae Kwang holds 36.99% of its own shares. If this equity were to be retired, it would be no different than the owner paying the inheritance tax with company funds.
An industry insider noted, "Conversely, the government could be seen as effectively assisting the owner in succession of management rights," and added, "However, given that disposing of unlisted shares received as payment is extremely difficult, the government cannot afford to miss the opportunity to sell at a price higher than the payment value."
TKG Tae Kwang is rooted in Tae Kwang Industrial, which was established by the late chairman Park. The company is a manufacturing and design firm that produces 10-15% of the total Nike shoe volume, generating stable revenue. Since the late chairman Park's death in 2020, his eldest son, Chairman Park, has been leading the group. Recently, it gained attention for trying to acquire Solmix.