1. What Happened?

On August 1, 2025, Truston Asset Management filed an injunction against Taekwang Industrial to block the issuance of convertible bonds worth approximately 300 billion won. This is part of Truston’s ongoing shareholder activism and a direct challenge to management decisions.

2. Why Did This Happen?

Truston Asset Management has been demanding improvements in Taekwang Industrial’s corporate governance and shareholder value. This injunction is part of that effort, aiming to prevent management from using convertible bonds to defend their control.

3. What is the Impact on Investors?

3.1 Short-Term Impact

  • Funding Disruption: If the bond issuance fails, Taekwang’s investment plans could be disrupted.
  • Increased Stock Volatility: Uncertainty surrounding the lawsuit’s outcome could increase stock price volatility.
  • Increased Management Uncertainty: The lawsuit could consume management’s time and resources.

3.2 Long-Term Impact

  • Potential Corporate Governance Improvements: If Truston’s shareholder activism is successful, corporate governance could improve.
  • Potential Increase in Shareholder Value: Along with corporate governance improvements, shareholder return policies could also improve.
  • Changes in Management Strategy: Depending on the outcome of the lawsuit, changes in management strategy may be inevitable.

4. What Should Investors Do?

Investors should closely monitor the outcome of the lawsuit, Taekwang Industrial’s financial situation, and the market environment. It is wise to maintain a conservative investment strategy and make investment decisions after checking additional information. Consulting with a financial advisor is also recommended.