This article was displayed on the ChosunBiz MoneyMove (MM) site at 9:12 a.m. on Jun. 1, 2026.
Daeho AL, which faces delisting over an embezzlement and breach of trust scandal, has been pushed into a management control dispute. A hedge fund manager, seeing little chance of recovering its investment due to a transaction halt, has set its sights on seizing control. It has even demanded the dismissal and replacement of the new CEO appointed by the company to contain the fallout.
According to the investment banking (IB) industry on the 1st, Daeho AL recently held a board meeting and adopted as a shareholders meeting agenda a proposal to dismiss nine people in total, including seven inside and outside directors and two auditors. Only CEO Yuk Yeong-su, a former head of production at Daeho AL who became a co-CEO this year, was excluded. Effectively, all directors have been put on the chopping block.
The push to dismiss directors was understood to be a shareholder proposal from hedge fund manager J&J Asset Management. J&J Asset Management is a minority shareholder with about 4.26% of Daeho AL's equity, and it became a shareholder by participating in a 10 billion won paid-in capital increase in Jun. last year that Daeho AL conducted to raise operating funds.
The dismissal targets of J&J Asset Management include not only former Daeho AL CEO Kim Yeong-dae, who was accused of embezzlement and breach of trust, but also CEO Kim Yong-muk, appointed in Mar. this year to manage the crisis. A certified public accountant, Kim Yong-muk was tasked with strengthening internal controls and helping the company overcome the delisting risk.
J&J Asset Management also proposed appointing seven new inside directors. They include Chief Operating Officer Jeong Hee-gyun of Noble Partners, CEO An Dong-ho of The Classic Investment Advisory, Head of Team Lee Ho-cheol of Systemand Application Technologies' legal team, and CEO Kim Pan-gyu of YPMJ. Jeong was also named a candidate for interim chair of Daeho AL's board.
Daeho AL, a specialist in aluminum sheets and coils, was founded in 2002. It is regarded as a solid materials company that has secured major Korean conglomerates such as Samsung SDI, SK On and Hyundai Rotem as clients, but it sparked controversy after a change in its largest shareholder in Aug. 2023, becoming entangled with moneylenders and the stock manipulation of YoungPoong Paper.
Its shares have been halted from transactions since Mar. 26 this year, putting the company at a crossroads over delisting. The trigger was a disclaimer of opinion by the auditor and the emergence of embezzlement and breach of trust allegations. While a remedial period has been granted until Apr. 14, 2027 for the disclaimer of opinion, a separate substantive review of listing eligibility regarding the embezzlement and breach of trust allegations is understood to be underway.
The shareholders meeting scheduled for the 11th is expected to be the first watershed in the control battle. Daeho AL's current management has also submitted its own agenda items. Centered on amending the articles of incorporation, appointing three outside directors and converting the auditor position to full-time, the company included the same measures in its management improvement plan submitted to the Korea Exchange (KRX) on the 15th of last month.
Specifically, the management improvement plan includes forming an independent management team completely severed from the current largest shareholders, Kim Seok-jin and Biz Alpha, and a full rebuild of internal controls over fund execution. In addition, Daeho AL laid out a plan to conduct a 20 billion won third-party allotment capital increase by Oct. 2026 to change the largest shareholder.
A fierce proxy battle over control is expected. The current largest shareholder's equity does not even reach 9%. The top shareholder of Daeho AL is Kim Seok-jin (8.21%). Kim is also said to be the largest shareholder (29% equity) of Biz Alpha, a management consulting corporation that holds 0.76% of Daeho AL's equity.
J&J Asset Management has begun soliciting proxies. In a disclosure late last month of "reference materials for proxy solicitation," it said, "Even though this is a life-or-death situation in which your shares could become worthless, the current management is neglecting to take steps to contain the crisis and keep the listing."
Some say the management control dispute will intensify after the shareholders meeting on the 11th. That is because there is a move, centered on small shareholders, to build a new management team that is neither J&J Asset Management nor the current team. In fact, shareholder consolidation is understood to have begun on the shareholder action platform ACT.
A source in the investment industry said, "Among small shareholders, it is true there are voices saying J&J Asset Management is not much different from the existing management and cannot be trusted," adding, "Based on the ACT platform, the small shareholder consolidation rate has surpassed 13%, putting them in the lead in terms of equity."
Meanwhile, J&J Asset Management is known as a hedge fund manager whose largest shareholders are restaurant owners born in the 1990s. CEO Kim Sang-guk, formerly of Woori Bank who later worked at sales agency Shinhwa D&M, founded the firm and sold it last year. Alumni of Meritz Securities and Sangsangin Savings Bank are listed as key portfolio managers.