The conflict over management control of Korea Zinc between Chairman Choi Yoon-beom and MBK Partners & Youngpoong is intensifying ahead of the extraordinary shareholder meeting scheduled for September. As both sides continue to challenge each other's management capabilities and credibility, the dispute has escalated to include allegations of 'false and misleading' information in the meeting materials, with potential criminal charges being discussed.
On August 20, Youngpoong and MBK Partners announced their intention to take legal action, claiming that Korea Zinc's recently released explanatory materials for the upcoming shareholder meeting contained false and distorted information. They allege that Korea Zinc misrepresented the management cases of companies in which they have invested, selectively presenting information to damage the credibility of MBK and its portfolio companies. Some of the companies mentioned in the materials have reportedly sent formal requests to Korea Zinc for the removal of the related content and prevention of future occurrences.
A representative from MBK Partners stated, 'The current management of Korea Zinc, including internal director Choi Yoon-beom, is indiscriminately distorting facts and damaging reputations by involving external companies unrelated to the meeting agenda. If Korea Zinc does not immediately delete the false materials and continues to make inappropriate voting recommendations, we will take all possible legal actions to protect shareholder rights and market trust.'
In response, Korea Zinc quickly countered these claims, emphasizing that Youngpoong and MBK have not specified which parts of the explanatory materials are inaccurate or provided objective evidence to support their allegations of falsehood. Korea Zinc asserts that the content in the materials was based on publicly available information, including announcements from financial authorities, disclosures, and media reports. They argue that issues related to MBK's portfolio companies, such as Homeplus's corporate rehabilitation application and credit rating downgrades, as well as incidents involving Lotte Card, are already known to the public.
Korea Zinc also contends that the core agenda of the upcoming extraordinary shareholder meeting involves the appointment of directors and audit committee members, making MBK's past management cases relevant to the meeting. They argue that information about decisions made and oversight conducted by MBK in companies where it was a major shareholder or investor is necessary for shareholders to evaluate the appointment of directors.
The escalating conflict reflects the competitive dynamics ahead of the shareholder meeting. Korea Zinc plans to hold the extraordinary meeting on September 9 to propose amendments to its articles of incorporation and appoint audit committee members.
The election of four independent directors will utilize a cumulative voting system, with both sides nominating two candidates each. Currently, the board consists of nine members from Korea Zinc and five from Youngpoong and MBK. Market observers suggest that it is likely both sides will share the four independent director seats equally.
As a result, the real contest will likely focus on the appointment of one independent director to the audit committee. The so-called '3% rule' will apply to this election, limiting the voting rights of the largest shareholder and related parties to a maximum of 3%.
While Youngpoong and MBK hold a majority stake, the application of the 3% rule means that the voting power of the largest shareholder is restricted, increasing the likelihood that the choices of general shareholders and institutional investors will determine the outcome. Since September 2024, MBK and Youngpoong have been in a dispute over management control with Chairman Choi Yoon-beom of Korea Zinc.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.