Korea Zinc Accuses Youngpoong and MBK of Resorting to Any Means for Hostile M&A

Stock Split Can Proceed If Injunction Is Withdrawn
Youngpoong Must Focus on Strengthening Governance

On March 8, Korea Zinc stated, "Although the Youngpoong-MBK Partners alliance outwardly claims to advocate for improved governance, in reality, they have repeatedly engaged in distortion and misleading actions, resorting to any means necessary to seize control of the board of directors and pursue a hostile merger and acquisition (M&A)."

According to recent reports, it has been revealed that employees of proxy solicitation firms hired by Youngpoong and MBK have been approaching shareholders while wearing what appears to be Korea Zinc employee ID badges and soliciting proxy votes.

On January 23 last year, when the temporary shareholders' meeting of Korea Zinc was held, Korea Zinc shareholders lined up to enter the shareholders' meeting hall at the Grand Hyatt Seoul in Jung-gu, Seoul. Photo by Jo Yongjun

Additionally, there have been instances where notices bearing only the company name "Korea Zinc Co., Ltd." were posted in front of the homes of shareholders who could not be reached, creating the mistaken impression that these individuals were company representatives. As a result, there have been a series of reports from shareholders experiencing confusion, such as mistakenly assigning their proxy votes.

Korea Zinc also pointed out that the shareholder proposals made by Youngpoong and MBK have contributed to shareholder confusion by reintroducing agenda items that they themselves had previously filed injunctions against or voted against in the past.

For example, the introduction of the executive officer system was directly proposed by Youngpoong and MBK at the temporary shareholders' meeting in January last year, but they voted against the proposal, causing it to be rejected. Nevertheless, they have resubmitted the same agenda item for this year’s shareholders’ meeting, which has drawn criticism for further confusing shareholders.

As for the stock split, the current management of Korea Zinc first proposed it, and the agenda was passed with more than two-thirds approval of the voting shares at the temporary shareholders' meeting last January. However, its effect was suspended due to a court injunction requested by Youngpoong and MBK to suspend the resolution of the shareholders’ meeting. With the Supreme Court’s decision pending on this matter, Korea Zinc criticized the reintroduction of the same agenda as causing unnecessary confusion.

Korea Zinc intended to present the stock split agenda at the regular shareholders' meeting in March last year. However, after review by the relevant authorities, it was indicated that the matter should be postponed until the main lawsuit on the "suspension of shareholder resolution effectiveness" was concluded, so it was not separately included in that shareholders’ meeting.

Korea Zinc argued that Youngpoong and MBK, without verifying the facts, have been making unfounded and false claims by stating, "The exclusion of the stock split agenda is evidence that the current management does not wish to proceed with the stock split."

Korea Zinc’s position is that if Youngpoong and MBK immediately withdraw the injunction regarding the stock split, the company can proceed with the stock split process in consultation with the stock exchange without having to wait for a shareholders’ meeting resolution.

A Korea Zinc representative stated, "In recent years, Youngpoong’s corporate value, reputation, and internal control systems have been so severely damaged that recovery is difficult," adding, "Youngpoong’s management has failed to present a substantive plan for normalization of management to the market and shareholders, nor have they sufficiently shared a concrete restoration plan for environmental pollution issues."

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