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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] SEOUL, June 12 — South Korea’s Korea Fair Trade Commission has initiated sanction procedures against Korea Zinc over allegations that it created a circular shareholding structure using overseas affiliates to restrict rival voting rights.
According to industry sources on June 11, the regulator sent a review report—equivalent to an indictment—to Korea Zinc in April, outlining potential violations.
The probe centers on whether Korea Zinc unlawfully formed a circular ownership loop involving its overseas subsidiary. The issue emerged amid an ongoing management dispute with Young Poong and MBK Partners.
In January last year, Sun Metal Corporation acquired a 10.3% stake in Young Poong from parties including the family of Korea Zinc Chairman Choi Yoon-beom. The transaction created a circular structure linking Korea Zinc, Sun Metal Corporation, Young Poong, and back to Korea Zinc.
Under Korean commercial law, such arrangements can restrict voting rights when cross-shareholdings exceed certain thresholds. Regulators are examining whether the structure was used to limit Young Poong’s voting power in Korea Zinc.
Young Poong and MBK Partners have alleged that the transaction was an attempt to circumvent restrictions on cross-shareholding within large business groups, and filed a complaint with the KFTC.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
