Taeyoung Group reportedly failed to fulfill its promise to use the proceeds from the sale of its affiliates to secure the liquidity of Taeyoung Engineering & Construction. Taeyoung Group decided to lend the proceeds to Taeyoung E&C through a board resolution and disclosed a specific date, but did not honor the agreement. Taeyoung E&C reportedly failed to repay some of its commercial bonds worth 148.5 billion won.

Financial authorities have expressed concern that Taeyoung group has not fulfilled its initial self-rescue plan, let alone making private contributions from the owner's family, including chairman Yoon Seok-min (60) and founder Yoon Se-young (91). There is also a possibility that the debt workout will be rejected at the first creditors' meeting scheduled for January 11.

According to a recent report by Kyunghyang Shinmun on January 1, Taeyoung Group did not lend Taeyoung E&C the funds for the sale of Taeyoung Industry that it received on December 28 last year when it applied for Taeyoung E&C's debt workout.

TY Holdings announced on December 28 that it would lend 111.3 billion won to its subsidiary, Taeyoung E&C, for one year. The purpose of the loan was explained as securing the stability of Taeyoung E&C's financial operations, which was approved by the board of directors.

Earlier, TY Holdings applied for the debt workout of its affiliate Taeyoung E&C, saying it would use 240 billion won from the sale of Taeyoung Industries for settling Taeyoung E&C's commercial bonds worth 240 billion won, which are due on December 29 last year as part of its self-rescue plan.

In other words, the conglomerate, which is seeking help from creditors due to its affiliate's lack of liquidity, has not only failed to fulfill its promises but also failed to comply with its disclosure obligations.

Taeyoung E&C has reportedly paid off most of its commercial debts to suppliers, but not all of its debts to financial companies. When a company applies for a debt workout, its financial debts are frozen at least until the decision to initiate the debt workout is made, and up to four months after the workout begins, but the company reportedly promised to repay all of them in its self-rescue plan.

Financial authorities also told the media that the proceeds from TY Holdings' sale of Taeyoung Industries will be used to repay Taeyoung E&C's commercial bonds. As a result, criticism is expected to grow over the failure of Taeyoung Group's management and supervision.