Lee Bok-hyun, chief of the Financial Supervisory Service (FSS), ordered a probe into the "overheated" tender offers for the world's largest zinc smelter.
"If any unfair trading, such as rumor-spreading, aimed at disrupting the tender offers is discovered, strict measures will be taken," Lee said. He added that excessive price competition could harm shareholder value.
Young Poong, the company's largest shareholder, and MBK Partners are seeking management control of the zinc smelter. They raised their offer price for the second time on Friday to match Korea Zinc and Bain Capital's counteroffer.
The FSS chief called for a thorough review of potential violations of the Capital Market Act or other relevant regulations. Lee also urged measures to protect financial consumers, citing concerns over potential investor losses resulting from the takeover battle.
Korea Zinc was co-founded in 1974 by Chang Byung-hee and Choi Ki-ho. Currently, management is under the Choi family, while the Chang family oversees Young Poong and its electronics affiliates.
Since Choi Yun-beom became chairman in 2022, competition for shares of Korea Zinc has intensified between the Choi and Chang families.
