After Taekwang Industrial said it would use 24.4% of its treasury shares as funding for mergers and acquisitions (M&A) instead of canceling them, No. 2 shareholder Truston Asset Management pushed back.
According to the Financial Supervisory Service's electronic disclosure system on the 1st, Taekwang Industrial said in its "2026 plan to enhance corporate value" that it would use 271,769 treasury shares (24.4% equity) as a strategic M&A exchange tool. However, the company said it will select the business field first and then seek shareholder approval at the 2027 regular shareholders meeting for a specific use plan.
Truston Asset Management, the No. 2 shareholder, immediately pushed back. Truston said, "If treasury shares are to be used as an M&A exchange tool, the share price must properly reflect corporate value, but Taekwang Industrial's price-to-book ratio (PBR) is 0.22 times, not even half the industry average (0.54 times)," adding, "It means handing over shareholder assets worth four to five times the intrinsic value at a bargain price based on market price."
Regarding the condition of timing the approval at the 2027 shareholders meeting, it said, "This is nothing more than an ex post excuse to avoid canceling treasury shares," and "in substance, it can only be interpreted as an attempt to maintain the controlling shareholder's friendly equity and permanently avoid the obligation to return profits to shareholders."
It also pointed out problems such as the value-up plan lacking concrete quantitative targets like payout ratio and total shareholder return (TSR), and only 500 million won (0.06% of market capitalization) of the 1.5 billion won in 2025 settlement-of-account dividends going to general shareholders. The assessment was that it is a poor plan that does not meet even the minimum requirements of the Korea Exchange (KRX) value-up guidelines.
Truston demanded that Taekwang Industrial's board of directors immediately reconsider the plan to enhance corporate value. It stressed that a future revision must include two or more quantitative targets such as payout ratio or TSR, the codification of a phased cancellation principle for 24.4% of treasury shares, and the reset of the ROE target to exceed the cost of capital.