Daemyung Sono Files Injunction to Postpone T'way Air Director Appointment... Formalizes Management Control Showdown

Request to Propose Appointment of Nine Directors
Legal Action Taken After T'way's Silence on Shareholder Proposals
Provisional Injunction Filed to Inspect Shareholder Registry

Daemyung Sono Group, which is pushing to enter the aviation industry, has decided to seek a court ruling with the aim of forming a new board of directors for the low-cost carrier (LCC) T'way Air ahead of the company's regular shareholders' meeting scheduled for March. This demonstrates their intention to restructure the board to acquire management rights of T'way Air and engage in a proxy battle with the existing largest shareholders, T'way Holdings and Yerimdang.

According to the Financial Supervisory Service's electronic disclosure system on the 6th, Sono International, the holding company of Daemyung Sono Group, filed a provisional injunction with the Daegu District Court on the 31st of last month, requesting the inclusion of agenda items for the regular shareholders' meeting of T'way Air. They demanded the proposal for the appointment of nine new director candidates and two audit committee candidates be included.

The director candidates proposed by Sono International include three inside directors, four other non-executive directors, and two outside directors. The inside director candidates are ▲Sang-yoon Lee, General Executive of Sono International's Aviation Business TF ▲Woo-jin Ahn, General Executive of Sono International's Sales Marketing and Development Headquarters ▲Dong-bin Seo, Executive in charge of Sono International's Aviation Business TF.

Group affiliates such as Jun-hyuk Seo, Chairman of Daemyung Sono Group, Kwang-soo Lee, Head of Sono International Holdings Division, Byung-chun Lee, Head of Sono International Operations Division, and Kwang-soo Kwon, CEO of Daemyung Sono Season, were included as candidates for other non-executive directors. Jong-deuk Kim, former CEO of Woori Comprehensive Finance, and Yong-pyo Yeom, Managing Representative Attorney of Yulchon, were recommended as outside directors and audit committee candidates.

On the 21st of last month, Sono International requested T'way Air to include shareholder proposals for the regular shareholders' meeting agenda and to inspect the shareholder registry. Prior to that, on the 20th of last month, they also delivered a management improvement request to T'way Air and CEO Hong-geun Jeong demanding ▲a complete replacement of the management team ▲a capital increase for the stable operation of T'way Air.

At that time, Sono International explained, "We prioritize the growth of T'way Air and enhancement of shareholder value, and these proactive measures are intended to maximize that. We delivered the management improvement request and shareholder proposals to strengthen financial soundness and corporate competitiveness to establish a foundation for long-term growth." However, since they received no significant response from T'way Air, it is interpreted that they decided to seek the court's judgment.

As Sono International concretizes plans to have nine director candidates enter the board, it is expected that both sides will fiercely compete for board seats at T'way Air's shareholders' meeting next month. According to T'way Air's articles of incorporation, the number of directors must be between three and twelve. Currently, there are seven directors. Four directors whose terms expire in March include CEO Hong-geun Jeong and Hyung-yi Kim, two inside directors, and outside directors Sung-hoon Kim, a lawyer, and Sung-yong Choi, CEO of The Snowball.

Currently, T'way Holdings and Yerimdang, the largest shareholders of T'way Air, hold 28.02% and 1.72% of shares respectively as of last month. Including shares held by related parties, the total is 30.09%. Daemyung Sono Group, the second-largest shareholder, holds 26.77% combining Sono International's 16.77% and Daemyung Sono Season's 10.00%. The gap between the first and second largest shareholders is just over 3%.

T'way Air stated regarding Sono International's provisional injunction, "We plan to respond according to legal procedures," and reiterated that "we are internally reviewing various response measures."