Korea Zinc Audit Committee Member Appointed from Chairman Choi Yunbeom’s Side, Widening Board Gap (Comprehensive)

Appointment of Board-Nominated Candidate Approved
Park Yookyung, Nominated by Young Poong·MBK, Rejected
Board Restructured: 12 Seats for Chairman Choi’s Side, 7 for Young Poong

At the interim general shareholders' meeting of Korea Zinc, the group led by Chairman Choi Yoon-beom won the vote on the appointment of the audit committee member. Although the Youngpoong and MBK Partners alliance also increased the number of directors, the gap within the board widened further.

On September 9, during the 53rd Extraordinary General Meeting of Shareholders held at the Mondrian Hotel in Yongsan, Seoul, agenda item 3-1, regarding the appointment of one independent director to become an audit committee member, was approved.

Park Ki-deok, CEO of Korea Zinc, is speaking as the chairman of the 53rd interim shareholders' meeting. Korea Zinc

Agenda item 3-1, which proposed the appointment of Baek In-kyu, a candidate recommended by the Korea Zinc board of directors, was passed with 5,092,815 out of 6,225,934 voting shares in favor, achieving an approval rate of 81.8% of voting rights present. In contrast, agenda item 3-2, which proposed the appointment of Park Yoo-gyeong, former Head of Responsible Investment and Governance for Asia-Pacific at APG Asset Management and a candidate of the Youngpoong·MBK group, received 1,739,065 shares in favor, recording an approval rate of 27.93%, and was thus rejected.

During the previous cumulative voting for the appointment of four directors, two candidates classified as being from Chairman Choi's side (Lee Hyung-kyu and Seo Eunsook) and two from the Youngpoong·MBK group (Lee Joon-bong and Shim Hyesub) were all elected.

The Extraordinary General Meeting Proceeded Faster Than the Annual General Meeting

This interim shareholders' meeting proceeded more quickly than prior meetings. Although it was scheduled to begin at 10:00 a.m. at the Mondrian Hotel in Yongsan, Seoul, the procedures, such as the verification of overlapping proxy forms, took some time, and the meeting started at 10:25 a.m. In contrast, this year's annual general meeting in March was delayed by about one hour, and last year's interim meeting in January was delayed by more than four hours.

Outside the venue, a “proxy public opinion battle” unfolded between Chairman Choi's group and the Youngpoong·MBK group. Around 30 members of the Korea Zinc labor union, affiliated with the National Metal Workers' Federation under the Korean Federation of Trade Unions, held a rally displaying pickets and banners before the meeting began. They shouted, “MBK and Youngpoong, listen up! We are the ones who protect Korea Zinc.” Ever since the management dispute between Korea Zinc and the Youngpoong·MBK group began, the Korea Zinc labor union has supported the current management.

Conversely, the Korea Zinc Small Shareholders' Association hung a banner at the main entrance of the hotel, declaring, “One vote from a small shareholder protects Korea Zinc. The audit committee should become the watchdog for shareholders!”

Vote on Audit Committee Appointment Proceeded Relatively Calmly

On the morning of the 9th, the 53rd Extraordinary General Meeting of Shareholders of Korea Zinc is being held at the Mondrian Hotel in Yongsan, Seoul. Korea Zinc

In this extraordinary general meeting, three agenda items were handled: ▲Amendment of the articles of incorporation to expand the number of separately elected audit committee members ▲Appointment of four independent directors through cumulative voting ▲Appointment of one independent director as an audit committee member.

Items 1 and 2 concluded with both sides supporting and securing their preferred candidates. The most contentious issue was item 3; here, while the two sides presented their arguments, unlike the annual general meeting earlier this year, which saw repeated disputes over the interpretation of the exercise of voting rights, this time the debate was limited to presenting each side's views.

The Youngpoong group raised concerns about possible fund-related allegations involving Chairman Choi’s family and emphasized the need for the audit committee’s independence. Candidate Park, who was recommended by the Youngpoong group, also argued that oversight and checks on board decisions were necessary. Some shareholders questioned Baek In-kyu’s independence. On the other hand, it was pointed out that proxy advisors supported Baek’s candidacy, and that Baek was suitable for the audit committee position due to his accounting expertise.

The application of the “3% rule” was reportedly agreed upon in advance by both sides, interpreting Chairman Choi’s shares as being related to YPC as special related parties. While Chairman Choi’s shares were counted together with Youngpoong’s for calculation, the voting rights were exercised independently.

As a result of this vote, the Youngpoong·MBK group had to accept a “painful” outcome. Earlier this year, during the annual general meeting, the gap within the board of directors had been reduced from seven to four, but it has now widened again to five. Following this shareholders' meeting, the number of Korea Zinc board members increased from 14 to 19. Specifically, the number of directors classified as Chairman Choi’s group increased to 12, while the Youngpoong·MBK side now has seven directors. From the previous composition of nine for Chairman Choi’s group and five for the Youngpoong·MBK group, the gap has widened by one more member.

Youngpoong and MBK: “Broader Basis for Board-Level Investigation of Various Allegations”

Park Ki-duk, CEO of Korea Zinc, chairman of the 53rd extraordinary general meeting of shareholders of Korea Zinc, is striking the gavel. Korea Zinc

The Youngpoong and MBK group stated, regarding having seven directors on the board, that “We accept this as a significant responsibility given by shareholders to perform the board’s oversight functions faithfully,” in an official statement. They also said that the scope for the board to independently verify and substantially resolve matters such as Chairman Choi's family’s investments and suspected tunneling at the board level has been expanded.

Although they expressed regret that their candidate Park was not appointed, both companies stated, “We will continue to nominate candidates for separately elected audit committee members through open, public recommendations and independent external reviews.” They emphasized that the extraordinary general meeting was not a vote of confidence for management, but a procedure to strengthen the independence of the board of directors and the audit committee. They added, “An audit committee member is not a seat to defend Chairman Choi’s management rights, nor is an independent director a trophy for either side. Regardless of who recommends them, all independent directors must act and carry out their duties independently in the interests of Korea Zinc and all its shareholders.”

Finally, Youngpoong and MBK Partners declared, “As the largest shareholders of Korea Zinc, we will do our best to ensure that the newly restructured board operates transparently and responsibly, always prioritizing the long-term interests of the company and all shareholders, rather than the interests of Chairman Choi personally or any individual shareholder.”

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