Young Poong, MBK Raise Breach-of-Trust Allegations; Korea Zinc: "No Basis ... Reviewing Legal Action"

Rebuts Allegations Over Investments in One Asia Partners Funds
"Investment Decisions and Fund Disbursements Are at the Fund Manager's Discretion"
"Will Respond Firmly to Actions Undermining Corporate Value"

Korea Zinc said it may take legal action against Young Poong and MBK Partners, accusing them of repeating baseless claims after they raised suspicions of breach of trust and private-benefit taking in connection with investments in a fund managed by One Asia Partners.

Korea Zinc CI.

In a statement on October 12, Korea Zinc said, "Young Poong and MBK are interpreting some facts arbitrarily and presenting them as if new suspicions had emerged," adding that "unverified speculation and one-sided claims are causing confusion among the market and shareholders."

The controversy arose after Young Poong and MBK alleged that funds were managed for the benefit of a particular individual during Korea Zinc's investment in a fund managed by One Asia Partners.

Young Poong and MBK said on October 12, "In the two months between Chairman Choi's early investment in the unlisted drama production company Arc Media and the injection of KRW 25 billion in Korea Zinc funds, seven people in his inner circle, including acquaintances of Chairman Choi, took part in a paid-in capital increase through a third-party allotment and secured stakes in Arc Media in advance." They added, "One of the seven was appointed as an outside director of Korea Zinc and a member of its Audit Committee the following year," and said, "Strong criticism is mounting that this went beyond simple private-benefit taking and even neutralized and privatized the internal control system that should monitor and check the top executives."

A Young Poong official said, "This is a classic case of 'staking out a chokepoint' and a premeditated breach-of-trust scheme using undisclosed information," adding, "There would be no reason for people to line up to secure stakes in a startup drama production company with no track record that had been established just a month earlier unless they knew in advance that its corporate value would rise."

Korea Zinc countered that it participated only as a limited partner (LP) in the fund, while the fund manager, as the general partner (GP), had authority over the selection of individual investments, their timing and the disbursement of funds. It said the fund manager decides whether to invest after conducting investment reviews and due diligence, and that there was insufficient basis for the claim that Korea Zinc deliberately set aside company funds for a particular individual.

Korea Zinc countered that Young Poong and MBK were arbitrarily linking the timing of certain transactions to raise suspicions of "premeditated breach of trust" and "private-benefit taking." It criticized them for repeating the same claims for more than two years without presenting new facts or concrete evidence, calling this an extension of their campaign to sway public opinion in an effort to gain management control.

Korea Zinc said it is focusing its resources on future growth businesses, including construction of a U.S. smelter and expansion of critical-mineral supply chains. It urged Young Poong and MBK to stop raising unproductive suspicions and fulfill their responsibilities as shareholders.

A Korea Zinc official said, "We intend to respond firmly, including through legal action, to conduct that damages the reputation of the company and its management and undermines corporate and shareholder value through unverified allegations and arbitrary speculation."

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