The management dispute at Korea Zinc has entered its second year, with the company clashing with Youngpoong and MBK Partners over governance and future management direction. Korea Zinc emphasized the need to focus on building a critical mineral supply chain and future growth, while Youngpoong and MBK reiterated that the resignation of Chairman Choi Yoon-bum is essential for normalizing governance.
In a statement on the 28th, Korea Zinc said, "Based on the support from shareholders confirmed at the extraordinary general meeting held on the 9th, we will continue to enhance corporate value, ensure sustainable growth, and improve governance structure."
The company stressed the importance of focusing on its role in national key industries and strengthening future competitiveness, rather than becoming overly fixated on governance issues.
Korea Zinc is pursuing a 'Troika Drive' based on its existing smelting business, which includes initiatives in secondary battery materials, resource recycling, and renewable energy. Additionally, it is working on establishing a critical mineral supply chain through 'Project Crucible' in the United States, aiming to expand its global business base and secure new growth engines.
The company also plans to continue improving its governance structure. It has appointed an independent director as the chair of the board and introduced a board capability matrix along with evaluations from external professional organizations. During the extraordinary general meeting, it appointed Director Baek In-kyu to the audit committee and newly appointed independent directors Lee Hyung-kyu, Seo Eun-sook, Lee Jun-bong, and Shim Hye-seop.
Korea Zinc stated, "MBK Partners and Youngpoong are also major shareholders," adding that "sustainable growth and enhancing corporate value are goals that should be shared by management as well as all shareholders, including MBK Partners and Youngpoong." The company emphasized the need for collaboration centered on its long-term development and the interests of all shareholders.
In contrast, on the same day, Youngpoong and MBK directly challenged Chairman Choi Yoon-bum's management accountability. They claimed that the investment and governance issues raised over the past two years since the public offering in September 2024 have been substantiated through investigations, sanctions, and court rulings.
Youngpoong and MBK criticized the One Asia Partners fund, created with Korea Zinc's funds, for investing a total of 69 billion won in companies like Acmedia, Hi-Het, and Slingshot, which were personally invested in by Chairman Choi's family. They argued that while Hi-Het and Slingshot fell into complete capital erosion, resulting in investment risks for the company, Chairman Choi's family secured opportunities for capital recovery and increased equity value.
They also raised concerns about the deteriorating financial structure exacerbated during the investment in Ignio Holdings and the defense of management rights. According to Youngpoong and MBK, Korea Zinc borrowed over 2 trillion won from external sources during a 1.8 trillion won share buyback process, with its separate borrowings increasing from 387.6 billion won at the end of 2023 to 3.9966 trillion won by the end of 2024. Annual interest expenses are projected to rise from 25.6 billion won in 2023 to 153.1 billion won in 2025.
Youngpoong and MBK asserted, "The resignation of Director Choi Yoon-bum from management is the starting point for normalizing Korea Zinc's governance structure," emphasizing their commitment to uncovering the truth behind the allegations and illegal and improper activities that have emerged over the past two years and recovering the damages incurred by the company.
* This article has been translated by AI.
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