SEOUL (Bloomberg) — A Lazard Ltd. fund and a shareholder activist convinced South Korea's Taekwang Group to reorganise into a holding company as part of corporate governance reforms, triggering a surge in shares of the industrial group's units.As part of the agreement, Taekwang units will form policies to pay dividends, increase the number of outside directors, and create investor relations departments, Korean shareholder activist Jang Hasung, Lazard's partner, said in an e-mailed statement yesterday.

Shares of Taekwang Industrial Co., a textiles unit, surged by the 15 percent daily limit to a record 828,000 won ($900). Subsidiaries Daehan Synthetic Fiber Co. jumped 15 percent and Hungkuk Ssangyong Fire & Marine Insurance Co. rose 2.4 percent.

The concessions are a victory for Bermuda-based Lazard and Jang, who bought shares in Taekwang units almost four months ago, betting they would drive up the stock price by pressuring management reforms. Jang has sued companies such as Samsung Electronics Co., Asia's largest maker of chips and mobile phones, on behalf of minority shareholders and won.