Korea Zinc: "MBK, Young Poong Forcefully Link Separate Investment Deals... Distort Facts"

"Shifts responsibility for fund managers' investment decisions to capital-contributing companies"
Young Poong, MBK: "Choi Yoonbum's personal investment value rose 150-fold... Thorough investigation needed"

Korea Zinc rebutted allegations by Young Poong and MBK Partners that company funds were used to generate investment profits for Chairman Choi Yoon-bum, calling the allegations an attempt to arbitrarily link separate investment transactions.

Korea Zinc CI. Korea Zinc

In a statement issued on November 2, Korea Zinc said, "Claiming that Korea Zinc injected funds to support a particular individual by retrospectively linking transactions conducted by separate legal entities under their own judgment and responsibility is a distorted argument that disregards the basic structure of financial investment and the legal relationships between the parties to the transactions."

Korea Zinc explained that it has invested some of its surplus funds in financial products such as funds, and that it conducts investment activities in accordance with relevant laws and internal procedures. It said that fund managers lead the process of establishing investment plans, conducting due diligence and executing investments, and that it is unreasonable to argue that a contributing company should also identify and control the flow of funds from separate transactions conducted later.

The company also stressed that the appropriateness of an investment cannot be judged solely by whether a particular company is operating at a loss or whether the investment is related to its core business. It explained that financial investments are made after comprehensively considering not only a company's current performance but also its growth potential, investment terms and prospects for recovering the investment.

Korea Zinc also argued that the assessed value of a stake must be distinguished from actual realized returns in relation to Chairman Choi's investment gains. The company said, "Without objective verification, simply emphasizing the increase in assessed value relative to the initial investment and claiming that a particular individual actually obtained enormous profits distorts the facts."

Korea Zinc criticized Young Poong and MBK for repeatedly raising suspicions about certain investments since their attempt to take control of the company in 2024. In particular, it noted that Young Poong was recently included on a list of low price-to-book ratio (PBR) companies released by the Korea Exchange, arguing that the company should focus on improving its own corporate value rather than criticizing the management of other companies. It also referred to the Homeplus crisis and controversy surrounding the sale of Golfzon County in connection with MBK.

Young Poong and MBK, meanwhile, claimed that a fund run by One Asia Partners, to which Korea Zinc contributed capital, and Kakao had coordinated their investment transactions in advance. They said that the One Asia fund invested 100 billion won in Kakao affiliate Greigo in 2022, and that Kakao Entertainment later invested 50 billion won in Ark Media, in which Chairman Choi had previously invested. They further claimed that, in the process, the assessed value of Chairman Choi's initial investment stake, worth approximately 1.2 billion won, rose to approximately 184.2 billion won.

On November 2, Young Poong and MBK called it "clear indirect support that mobilized Korea Zinc's corporate funds to inflate the value of Director Choi Yoon-bum's personal investment assets by more than 150 times, as well as a serious allegation of breach of fiduciary duty," and called for a thorough investigation and accountability under the law.

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