Youngpoong and MBK Partners have decided to withdraw their lawsuit seeking to annul the resolutions made at Korea Zinc's extraordinary shareholders meeting held in January 2025.
According to industry sources on August 4, Youngpoong and MBK Partners have informed the court of their intention to withdraw the lawsuit, believing they have achieved all the objectives for which the lawsuit was originally filed. Consequently, as part of the legal process for resolving the matter with other shareholders, a court recommendation for settlement was issued on July 30. If no objections are raised by the parties involved within the legal timeframe, this decision will be finalized and will have the same effect as a court settlement.
The lawsuit was related to the extraordinary shareholders meeting held on January 23, 2025. Youngpoong claimed that Korea Zinc formed a mutual shareholding relationship by acquiring more than 10% of Youngpoong's shares through its overseas affiliate, SMC, just one day before the meeting, which restricted Youngpoong's voting rights on its shares in Korea Zinc.
The Seoul Central District Court ruled on March 7 of last year that there were issues with the actions taken by Korea Zinc's Chairman and CEO, Park Gi-deok, which limited Youngpoong's voting rights. As a result, the effectiveness of the resolutions made at the extraordinary shareholders meeting was suspended, and the duties of the four outside directors appointed at that meeting were also halted. Although Korea Zinc contested this decision, the ruling was upheld, and the matters resolved at that shareholders meeting are being addressed in the main lawsuit.
The decision to withdraw the lawsuit was influenced by the resignation of the outside directors who had been appointed at that meeting. All four outside directors, whose duties were suspended by the court's ruling, have recently resigned.
Youngpoong and MBK Partners also assessed that there was little benefit in continuing the lawsuit regarding the stock split and related amendments to the articles of incorporation. They explained that pursuing the stock split could enhance the accessibility and trading convenience of shares for minority shareholders, rather than canceling the resolutions due to procedural defects.
In March of this year, Youngpoong and MBK Partners submitted a proposal to amend the articles of incorporation for a stock split at Korea Zinc's regular shareholders meeting.
Youngpoong and MBK Partners stated, "As Korea Zinc's share price exceeded 1 million won, there were constraints in terms of accessibility for general investors and stock circulation. We expect that a stock split will help activate trading and stabilize supply and demand."
However, they plan to continue legal actions related to the process of restricting Youngpoong's voting rights, separate from this lawsuit withdrawal. They intend to pursue civil and criminal liability against Chairman Choi Yoon-beom and CEO Park Gi-deok, as well as investigate potential violations of fair trade laws.
Youngpoong and MBK Partners remarked, "This lawsuit withdrawal is a decision made after comprehensively considering the issues surrounding the outside directors and the stock split. The responsibility for unlawfully restricting the voting rights of the largest shareholder is a separate matter, and we will pursue related legal accountability to the end."
Meanwhile, Korea Zinc has decided to hold an extraordinary shareholders meeting on September 9 to elect one independent audit committee member and four independent directors.
* This article has been translated by AI.
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