Law Firm Weon Sends Shareholder Letter to T-Plex... "Proposes Auditor Appointment and Executive Compensation Rules"

Corporate Value Undervalued with a PBR of 0.48 and Excessive Family Management Criticized
In 2023, Executive Compensation Totaled 2.95 Billion KRW, Exceeding Total Dividends by Six Times
Excessive Family Management... Three Out of Four Board Members Are Relatives
Demand for Appointment of Former T-Plex Vice President (CFO) Koo Heechan as Full-Time Auditor Candidate

Attorney Lee Gyuseong of the law firm Weon announced on the 18th that he sent a shareholder letter containing a corporate normalization plan to T-Plex, a company listed on KOSDAQ.

The law firm Weon is the legal representative of a coalition of minority shareholders who have held more than 1% of T-Plex's total issued shares (excluding non-voting shares), totaling 24,217,645 shares, for over six months.

Attorney Lee proposed a corporate normalization plan aimed at maximizing shareholder value, including the appointment of an auditor favorable to minority shareholders, establishment of executive compensation regulations, and expansion of dividends. He pointed out T-Plex's current issues as undervalued corporate value and excessive family management.

In fact, as of the closing price on the 14th, T-Plex's price-to-book ratio (PBR) stands at about 0.48, indicating a significant undervaluation compared to the company's intrinsic value. The PBR is an indicator showing the stock price level relative to the company's net asset value, and a value below 1 is interpreted as undervaluation. Compared to the average PBR of 1.1 for domestic listed companies, T-Plex's PBR is evaluated to be only about 40% of that.

Most importantly, the causes of undervaluation were pointed out as low retained cash and excessive salary levels paid to related parties. In particular, poor shareholder returns relative to performance and excessively high salaries were criticized.

Despite a loss of 2.2 billion KRW in 2023, the total compensation of executives such as CEO Kim Youngguk (2.344 billion KRW) and Director Kim Taesu (615 million KRW) reached 2.958 billion KRW. This amount is more than six times the total dividend of 485 million KRW for the same year.

Even when extending the period to the past five years, the problem remains the same. The total compensation received by the two individuals over the past five years amounts to 9.287 billion KRW. This is a large sum compared to T-Plex's cumulative operating profit of 45.3 billion KRW during the same period. Meanwhile, the total dividends returned to shareholders amounted to only 3.033 billion KRW.

There was also criticism that excessive family management prevents proper checks and monitoring within the company. Currently, among the seven executives of T-Plex, four are relatives of the CEO, and among the four board members, three except for one outside director are related to the CEO. This was cited as a factor undermining the company's credibility and transparency.

Accordingly, Attorney Lee demanded the implementation of a dividend of 100 KRW per share to expand shareholder returns and the appointment of former T-Plex Vice President (CFO) Koo Hee-chan as a full-time auditor candidate to monitor management and manage risks.

In addition, to prevent a small number of board members from receiving excessive compensation from the company's profits, he proposed the establishment of "executive compensation regulations," which set limits on the compensation of executives, including non-registered directors.

The proposed executive compensation regulations stipulate that the maximum total amount for all directors be approved at the shareholders' meeting, and that this amount cannot exceed the total dividends based on the previous fiscal year's settlement.

Attorney Lee plans to submit these proposals as shareholder proposals at the upcoming March shareholders' meeting.

He stated, "After systemically normalizing the company, we must urge policies to enhance shareholder value such as expanding profit dividends and increasing retained earnings," and added, "We intend to ensure the appointment of an auditor representing minority shareholders and the establishment of executive compensation regulations at this shareholders' meeting."

This content was produced with the assistance of AI translation services.