Violation of the Capital Markets Act and Breach of Directors' Fiduciary Duties
"Claimed to Defend Management Rights, Then Signed Sale Contract"
The T'way Air Minority Shareholders Solidarity announced on the 11th that on the 10th, they filed a complaint with the prosecution against Na Seong-hoon, CEO of Yerimdang and Vice Chairman of T'way Air, and Na Chun-ho, Chairman of Yerimdang, on charges of violating the Capital Markets Act and breaching directors' fiduciary duties under the Commercial Act.
The Solidarity stated that this complaint is an additional legal response to allegations of unfair trading that deceived minority shareholders. They had also submitted a complaint to the Seoul Southern District Prosecutors' Office on the 7th.
The complaint included claims that "the major shareholder side caused market confusion by providing false information during the share sale process and severely infringed on the rights of T'way Air minority shareholders through an excessive control premium." It alleges violations of the Capital Markets Act (price manipulation, unfair trading, use of undisclosed material information) and breach of directors' fiduciary duties.
Earlier, on the 10th of last month, T'way Air stated in a shareholder letter that "protecting shareholder value is our top priority, and we will defend the company against hostile takeover attempts." However, just a week later, on the 17th, they signed a contract to sell T'way Holdings, the parent company of T'way Air, to Daemyung Sono Group. The Solidarity emphasized that this decision contradicted the previous announcement and was a deceptive act carried out without clear explanation to shareholders.
The Solidarity also claimed that Daemyung Sono Group's acquisition of T'way Holdings shares was conducted unreasonably. At the time, although T'way Holdings' stock price was around 700 won, Daemyung Sono Group purchased it at 4,774 won, paying a control premium approximately seven times higher. The Solidarity expressed concern that the excessive control premium paid by Daemyung Sono Group might be charged to T'way Air.
In this context, the Solidarity believes there is a high possibility that CEO Na abused his position to unfairly use internal information or made decisions unfavorable to shareholders.
Park Jong-jin, head of the Solidarity, said, "Decisions benefiting only specific stakeholders are being made repeatedly, ignoring the rights of minority shareholders who hold the majority of shares," and added, "We hope the truth of the matter will be fully revealed through this complaint at the prosecution." He further urged, "We ask the Financial Supervisory Service and judicial authorities to conduct a strict investigation so that unfair trading and deception of minority shareholders are no longer neglected."
In addition to the two complaints, the Solidarity collected shareholders' signatures through Act electronic signatures and requested investigations into the matter by the Financial Supervisory Service and the Fair Trade Commission. They also plan to file a provisional injunction regarding the ongoing lawsuit demanding inspection and copying of the shareholder registry against T'way Air.
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