"Restoring Audit Committee Independence"... Yongpoong and MBK Publicly Nominate Over 10 Candidates

Nomination of Audit Committee Members
with Voting Rights of the Largest Shareholder Restricted

Yonhap News Agency

Yongpoong and MBK Partners, who are engaged in a management rights dispute with Choi Yunbum, Chairman of Korea Zinc, have completed the public nomination process for outside director candidates to serve as Audit Committee members appointed separately from the board. This move comes amid the belief that the Audit Committee failed to fulfill its oversight and monitoring functions, as evidenced by Korea Zinc's severe disciplinary action for accounting violations.

On June 25, Yongpoong and MBK Partners announced that they had closed the public nomination process for Audit Committee candidates, which began on June 5. They explained that more than 10 candidates with expertise and experience in various fields—including corporate management, accounting and finance, law and compliance, ESG (environmental, social, and governance), industry and technology, and risk management—were recommended through this process. A wide range of stakeholders participated in the nominations, including Korea Zinc shareholders, corporate governance organizations, non-governmental organizations (NGOs), and professional associations.

Previously, Korea Zinc had limited the right to nominate Audit Committee candidates to shareholders with a certain minimum stake. In contrast, Yongpoong and MBK Partners expanded the pool of eligible recommenders to include Korea Zinc shareholders, corporate governance organizations, and professional associations, in an effort to ensure the independence of Audit Committee candidates.

Yongpoong and MBK Partners plan to have an independent candidate review committee, consisting of three external experts, select the final candidates. A representative from Yongpoong and MBK Partners stated, "This process is aimed at identifying candidates who can restore the independence and oversight function of Korea Zinc's Audit Committee and contribute to the establishment of a sound corporate governance structure for the company. We hope to select the optimal Audit Committee candidate who can perform their duties independently from any particular shareholder or the management."

Previously, Korea Zinc and Yongpoong were sanctioned by the financial authorities after it was revealed that they had prepared and disclosed financial statements in violation of accounting standards. Korea Zinc failed to properly reflect investment asset valuation losses and impairment losses on goodwill at overseas subsidiaries. Yongpoong was criticized for underestimating environmental provisions, such as those for remediating contaminated soil and groundwater at its smelters. On June 10, the Securities and Futures Commission under the Financial Services Commission decided on disciplinary actions against both companies, including appointing external auditors for three years, imposing fines, recommending the dismissal of executives, and suspending duties.

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