Taekwang Industrial announced on the 28th that it had submitted a complaint to the Financial Supervisory Service, requesting an investigation into Truston Asset Management, which pressured a high-priced public purchase and massively sold off equity before the block deal disclosure.
Taekwang Industrial explained that the high-priced public purchase, which amounts to three times the market price, constitutes artificial stock price manipulation and market order disruption, effectively coercing its directors into illegal acts.
In the complaint, Taekwang Industrial stated, "Truston demanded the sale of major assets of Taekwang Industrial through shareholder letters in February and March and requested to buy back its own shares worth 180 billion won at 2 million won per share to burn them."
Considering that Taekwang Industrial's stock price was 621,000 won on February 3, when Truston first sent the shareholder letter, the public purchase price demanded by Truston corresponds to 3.2 times the market price.
Taekwang Industrial, after reviewing it with a law firm, rejected Truston's proposal, stating, "A high-priced public purchase is likely to cause a temporary surge in stock prices followed by a sharp decline," and added, "It could lead to an investigation by financial authorities and a prosecution for market order disruption or stock price manipulation."
Additionally, Taekwang Industrial raised concerns that conducting a high-priced buyback could lead to delisting. If the number of shares in circulation decreases after a public purchase, a reduction in trading volume is inevitable, ultimately resulting in meeting the requirements for delisting after being designated as a management issue.
Taekwang Industrial claimed that Truston's behavior is a typical example of "greenmail." Greenmail refers to a tactic used primarily by corporate raiders who accumulate equity and then pressure major shareholders to sell their shares at a high price for profit.
As of February 3, Truston's holdings in Taekwang Industrial amounted to 67,669 shares, and had Taekwang Industrial accepted Truston's demands, its stock price would have risen to 2 million won, increasing the estimated value of Truston's equity from 42 billion won to 135.3 billion won, a rise of 93.3 billion won.
A Taekwang Industrial official noted, "Truston effectively coerced the directors into criminal acts to reap capital gains nearing 100 billion won and hundreds of millions in performance fees," adding, "The behavior of a recognized asset management company intimidating the board of directors of a public company for short-term profit should no longer be tolerated."
Taekwang Industrial also raised questions about Truston disposing of its shares in large quantities in the stock market before the block deal.
According to Truston's corrected announcement on the 24th titled 'Report on the Status of Large Shareholdings,' Truston sold 9,023 shares in a continuous net sell-off from May 20 to June 11, amounting to 13.3% of its holdings at that time, with a selling amount of 8.5 billion won.
A Taekwang Industrial official stated, "This is the first time Truston has sold off a large number of Taekwang Industrial shares in the market after acquiring them in 2021," and added, "There is sufficient suspicion that they disposed of them in advance, anticipating a fall in stock price ahead of the block deal on the 18th."