Korea Zinc announced plans to file a criminal complaint against representatives of Youngpoong and Korea Corporate Investment Holdings for defamation and obstruction of business ahead of an extraordinary shareholders' meeting scheduled for September 9. Korea Corporate Investment Holdings is a special purpose company established by MBK Partners to acquire shares in Korea Zinc.
Korea Zinc claims that the materials posted on the campaign website on August 12, which solicited proxy voting, contained false information regarding the nomination of director candidates representing all shareholders at the 2026 extraordinary shareholders' meeting.
The issues raised by Korea Zinc include the disposal of treasury shares, issuance of new shares, violations of accounting standards, accounting treatment related to Ignio Holdings, resignations of independent directors, and the circumstances surrounding the extraordinary shareholders' meeting.
Youngpoong and Korea Corporate Investment Holdings allege that Korea Zinc allocated 15.5% of its issued shares to friendly forces through the disposal of treasury shares and issuance of new shares, with many related transactions now subject to legal proceedings. In response, Korea Zinc stated that these transactions were conducted for strategic partnerships and new business initiatives, and that only one case is currently in the appeals process.
Regarding the alleged accounting violations, the two sides have conflicting claims. Youngpoong and Korea Corporate Investment Holdings assert that no follow-up actions were taken by the board after sanctions were imposed, while Korea Zinc contends that it has enhanced controls related to impairment of investment assets and implemented procedures to prevent omissions in disclosures of related parties, which were reported to the audit committee.
In response to claims of intent to conceal losses related to Ignio Holdings, Korea Zinc argued that regulatory authorities determined the issue was due to negligence rather than intent.
There are also differing views on the resignations of independent directors and the circumstances of the extraordinary shareholders' meeting. Youngpoong and Korea Corporate Investment Holdings claim that the independent directors resigned at the behest of Chairman Choi Yoon-beom ahead of a court ruling regarding voting rights restrictions. Conversely, Korea Zinc explained that the timing and outcome of the related case had not been finalized, and that the independent directors resigned for personal reasons.
Korea Zinc maintains that the extraordinary shareholders' meeting was convened to meet the requirements for forming an audit committee under the amended Commercial Act. It noted that a proposed amendment to the articles of incorporation to expand the audit committee was not passed at the regular shareholders' meeting in March, necessitating a separate extraordinary meeting.
Korea Zinc plans to file complaints against representatives of Youngpoong and Korea Corporate Investment Holdings for defamation under the Information and Communications Network Act, defamation through publications, and obstruction of business, stating that the materials were also used in soliciting proxy voting from institutional investors and during the investor relations process.
A representative from Korea Zinc stated, "If false information is disseminated ahead of the shareholders' meeting, it could influence shareholders' judgments and voting rights."
The extraordinary shareholders' meeting is set to take place at 10 a.m. at the Mondrian Hotel in Yongsan, Seoul on the 9th.
* This article has been translated by AI.
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