As Korea Zinc prepares for its extraordinary shareholders meeting next month, major domestic and international proxy advisory firms are backing Chairman Choi Yoon-bum's candidate.
Following the recommendation from domestic firm Sustainalytics, global proxy advisory firm ISS has also advised support for Baek In-kyu, the candidate recommended by Korea Zinc's board. This development could influence the voting outcome at the extraordinary shareholders meeting scheduled for next month.
According to industry sources, ISS published an analysis report on the extraordinary shareholders meeting on August 24, recommending a 'FOR' vote for Baek and an 'AGAINST' vote for Park.
ISS noted that Baek's expertise in accounting, auditing, and internal controls aligns more directly with the key tasks currently facing Korea Zinc's audit committee.
Baek's extensive experience in accounting, auditing, financial consulting, and internal controls, including a senior position at Deloitte Korea, was also viewed positively.
ISS found no issues with the candidate nomination process, stating that it did not find evidence suggesting that the nomination process conducted by Korea Zinc's independent director nomination committee, composed entirely of outside directors, was inappropriate or inconsistent with generally accepted governance standards.
Earlier, Sustainalytics also recommended a 'FOR' vote for Baek on August 20. While there was no significant difference in the independence of the two candidates, Baek was deemed relatively more suitable due to his expertise directly related to the core duties of the audit committee, such as financial reporting and internal controls.
With both domestic and international proxy advisory firms supporting Korea Zinc's candidate, attention is now focused on how foreign and institutional investors will vote at next month's extraordinary shareholders meeting. Although proxy advisory recommendations do not bind actual votes, they are often used as key decision-making resources by foreign institutional investors when exercising their voting rights.
The election of the audit committee member is seen as a critical battleground in the voting contest between Korea Zinc and MBK and Youngpoong. As the competition for shares continues, the choices of foreign and institutional investors are emerging as a significant variable that could determine the final outcome.
Ryu Young-jae, CEO of Sustainalytics, recently emphasized the importance of long-term industrial competitiveness and investment continuity. He pointed out on his social media that the investment recovery period and profit structure of private equity funds could conflict with the timelines of long-term industries. In large-scale capital-intensive industries, considerations must be made regarding equipment maintenance and expansion, environmental and safety investments, human capital investments, and technology accumulation, which may be overshadowed by short-term cash flow concerns.
With ISS's recommendation, the voting contest over the appointment of the audit committee member between Baek from Korea Zinc's management and Park from MBK and Youngpoong is expected to intensify, influenced by the judgments of proxy advisory firms.
Korea Zinc will hold its extraordinary shareholders meeting on September 9, where it plans to appoint four independent directors and one independent director to serve on the audit committee. A cumulative voting system will be applied for the appointment of the four independent directors, with Korea Zinc and MBK and Youngpoong each nominating two candidates. The election for the single audit committee member will be contested between Baek and Park.
* This article has been translated by AI.
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