Clash Intensifies Ahead of Korea Zinc Annual Shareholders’ Meeting... MBK, Youngpoong vs. KZ Precision Escalate Dispute

KZ Precision Submits Shareholder Proposals to Youngpoong:
Separate Election of Audit Committee Members,
Elevating ESG Committee, and More
"Strengthening Governance Oversight"

Youngpoong Files Damages Suit Over Cross-Shareholding:
"Shareholder Value Undermined by Voting Rights Restrictions"

Korea Zinc, MBK Partners, and Youngpoong, which have been embroiled in a management control dispute, are heading toward a direct confrontation ahead of the Korea Zinc annual general shareholders' meeting scheduled for the 23rd.

KZ Precision (formerly Youngpoong Precision), an affiliate of Korea Zinc, announced on the 4th that it had formally submitted a shareholder proposal to the Youngpoong board of directors ahead of Youngpoong’s 75th annual general shareholders' meeting. The proposal includes expanding the separate election of audit committee members and partial amendments to the articles of incorporation to establish a legal basis for in-kind dividends.

KZ Precision holds 680,590 common shares of Youngpoong, representing a 3.76% stake. In addition, KZ Precision requested the elevation of the ESG Committee to a “board-level committee” so that environmental and safety risks can be continuously monitored at the board level, and also called for shareholder proposals related to the acquisition and cancellation of treasury shares.

Market analysts interpret the latest shareholder proposal as a strong check on Youngpoong’s management and board of directors. In particular, it is viewed as a means of applying pressure on the Youngpoong side, which, in partnership with MBK Partners, is seeking to acquire management control of Korea Zinc.

The KZ Precision side stated, “This shareholder proposal aims to restore Youngpoong’s corporate value and credibility by strengthening oversight and checks on controlling shareholders and management, protecting shareholder rights, and expanding shareholder returns. The Youngpoong board should respect the shareholder proposal rights guaranteed by the Commercial Act, submit the proposed agenda items for discussion, and ensure that all shareholders can participate in discussions and make well-informed decisions.”

In response, Youngpoong also issued a press release on the same day, announcing that it had filed a damages claim lawsuit against KZ Precision, Chairman Choi Changgyu, and CEO Lee Hansung.

Youngpoong asserted, “In the course of the dispute over management control of Korea Zinc, KZ Precision deliberately created the appearance of cross-shareholding in violation of the law, causing significant damage to the company.”

Previously, in January of last year, KZ Precision created a circular ownership structure by transferring its Youngpoong shares to Sun Metal Corporation (SMC), a second-tier subsidiary of Korea Zinc.

As a result, at the Korea Zinc extraordinary shareholders' meeting held on January 23 last year, Youngpoong’s voting rights were restricted. Consequently, candidates for the Korea Zinc board of directors recommended by the MBK Partners and Youngpoong side were unable to join the board.

Youngpoong stated, “We have filed a damages suit against KZ Precision in order to restore the value of Youngpoong’s shares and protect shareholder rights, which have been undermined by the illegal restriction of voting rights. As the largest shareholder of Korea Zinc, we will continue to fulfill our responsible role in normalizing the company’s governance structure and enhancing shareholder value.”

This content was produced with the assistance of AI translation services.