Korea Zinc, embroiled in a management dispute with its largest shareholders, Youngpoong and MBK Partners consortium, saw its shares drop by 8% during trading. The conflict is intensifying ahead of an extraordinary general meeting next month, where both sides are battling over the appointment of an audit committee member.
As of 10:17 a.m. on August 31, Korea Zinc's shares were trading at 1,265,000 won, down 110,000 won (8.00%) from the previous trading day, according to the Korea Exchange.
The two sides will face off at the extraordinary general meeting on September 9 over the selection of an independent director to serve on the audit committee. Korea Zinc's board has nominated Baek In-kyu, while the Youngpoong and MBK side has put forward Park Yu-kyung. If Baek is appointed, the board's composition will shift to a more favorable 12 to 7 for Korea Zinc.
So far, major domestic and international proxy advisory firms have leaned toward supporting Baek's candidacy. According to Korea Zinc, seven firms, including ISS, Glass Lewis, Egan-Jones Proxy Services, PIRC, Sustainalytics, ESG Research Institute, and Korea Proxy Advisory, have expressed support for Baek, while all recommended against Park. In contrast, the Korea ESG Standards Institute opposed Baek and supported Park's appointment.
Baek's expertise in accounting and finance has influenced the judgments of key advisory firms. He holds certifications as a CPA in both Korea and the U.S. and has worked as a partner at Deloitte Anjin for nearly 30 years. Korea Proxy Advisory noted the lack of accounting professionals on Korea Zinc's audit committee, emphasizing the need for enhanced expertise. Glass Lewis also positively assessed Baek's experience in accounting and internal controls.
As the extraordinary general meeting approaches, tensions are escalating between the two sides. Last week, Youngpoong and MBK raised allegations that Choi Yoon-bum, the chairman of Korea Zinc, misappropriated some funds from investment company funds for investments in private companies.
In response, Korea Zinc stated that these claims distort the facts and warned of potential legal action. Given that the outcome of the audit committee member appointment will impact the future board structure, the management dispute is expected to intensify leading up to the extraordinary general meeting on September 9.
* This article has been translated by AI.
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