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Korea Zinc. (Photo: Korea Zinc) |
[Alpha Biz= Kim Jisun] On the 15th, Yeongpung Group and MBK Partners announced that they plan to file a court injunction to block the issuance of new shares by Korea Zinc, alleging that the company’s U.S. smelter project is being pursued by Chairman Choi Yoon-beom primarily as a means of defending management control.
In a press release, Yeongpung and MBK stated, “Earlier today, media reports indicated that Korea Zinc’s management held an extraordinary board meeting to discuss a third-party allocation of new shares to fund the U.S. smelter project. As the largest shareholders of Korea Zinc, Yeongpung and MBK board representatives were completely excluded from prior reporting or discussions on this critical agenda affecting the company’s future.”
The two shareholder groups criticized the extraordinary board meeting process, saying, “Excluding the largest shareholder representatives from prior reporting and discussion constitutes a serious procedural breach that effectively neutralizes the board’s function.”
They also warned that transferring approximately 10% of the company’s core shares to foreign investors while the company assumes investment risks of around KRW 10 trillion could create an “abnormal structure with potential breach of fiduciary duty.”
Yeongpung and MBK further argued, “This agenda appears aimed more at Chairman Choi Yoon-beom’s personal defense of management rights than at the company’s business needs, effectively sacrificing ‘zinc shareholding’ against national interest. Investment by the U.S. government in Korea Zinc shares rather than the project itself constitutes a ‘white knight’ structure for management control, contrary to business logic.”
They also expressed concern that constructing a “twin plant” of the Ulsan smelter in the U.S. could lead to the hollowing out of domestic smelting industries, potential leakage of core technologies, and disruption of domestic production and export structures.
Finally, Yeongpung and MBK stated that the proposed capital increase infringes on existing shareholders’ preemptive rights and harms the company. They emphasized, “We will take legal action to ensure corrective measures are enforced.”
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
