Korea's underwear giant BYC asked to open accounting books

Insider trading without due process.

This is what South Korea's Truston Asset Management, the No. 2 stakeholder of underwear giant BYC with 8.13%, has accused BYC of in a shareholder letter asking for the latter to open its accounting books. If suspicion of a violation appears in the minutes of the company's board meeting, BYC will face additional pressure through an audit.

"We read the minutes of the BYC board meeting on Oct. 6 to confirm if transactions between the company's owner family and affiliates followed the proper legal process," Truston said on Monday. "Our data analysis verified that most internal transactions over the period were done without due process such as obtaining prior board approval."

"We requested the opening of BYC's accounting books to see what effect the transactions had on the company," it added. 

Under law, if a company director conducts a transaction with a corporation holding over a 50% stake in the same company, prior board approval and assessment of the transaction's legitimacy are required.

If a violation is confirmed, the director in question could face responsibility for damages and disciplinary action for breach of trust. If more infractions are found through the audit, Truston said it will review actions such as filing a shareholder derivative suit, reporting to the Fair Trade Commission and taking legal action to investigate the extent of the owner family's responsibility.

Write to Eui-myong Park at uimyong@hankyung.com