언론보도

'Korea Zinc's Extraordinary General Meeting Advocating
'Minority Shareholder Rights Protection'
—Was It Actually Meant to Protect Chairman Choi Yoon-beom,
Who Holds Only a Minority Stake?

- The majority shareholder lost their voting rights during the extraordinary general meeting they initiated.

- This is an anti-capitalistic behavior that thoroughly deceived shareholders and the capital market.

- The results of the extraordinary general meeting, filled with illegal and unlawful practices, are deemed completely invalid, and those responsible will be held accountable.

In the extraordinary general meeting of Korea Zinc held on the 23rd, which was called by the majority shareholder to improve the company's distorted governance, an unbelievable event occurred in the South Korean capital market: the majority shareholder’s voting rights were taken away due to illegal and unlawful actions.

Korea Zinc's Chairman Choi Yoon-beom, upon receiving a court ruling that the election of directors through a cumulative voting system was illegal, realized that defending management rights through legal and legitimate means would be difficult. As a result, they hastily devised an illegal 'cross-shareholding' scheme that violated the law to unjustly block the majority shareholder’s right to vote.

Chairman Choi Yoon-beom’s side transferred the shares previously held by the Choi family in Young poong to Sun Metal Corporation (SMC), a fully owned subsidiary of Korea Zinc in Australia, creating a loop of shareholding between different companies. They argued that the 'mutual shareholding restriction' applied and used this to take away the voting rights of Young poong, the majority shareholder, during the extraordinary general meeting.

However, SMC is a foreign corporation and a limited company, so the voting rights restrictions under the Commercial Act do not apply.

Using such a tactic to limit the majority shareholder’s voting rights is widely seen by the legal community as going against the intent of the 'mutual shareholding restriction' outlined in Korean commercial law. There is also a dominant opinion that this approach contradicts the fundamental principles of capitalism, which aim to protect the management rights of major shareholders.

Furthermore, Chairman Choi’s use of the foreign company SMC to bypass the regulations on cross-shareholding and circular shareholding under the Fair Trade Act, while arguing that Korean commercial law should apply to SMC, is not only self-contradictory but also directly contradicts the purpose of the Fair Trade Act, which prohibits cross-shareholding and circular shareholding.

Ultimately, Chairman Choi Yoon-beom's side attempting to defend management rights by taking advantage of the 'mutual shareholding restriction' system is an anti-capitalistic and reckless behavior that thoroughly deceives shareholders and the capital market.

As a result, the series of actions—following Korea Zinc's stock buyback, withdrawal of the capital increase, and now the illegal circular shareholding—clearly show that the intention was not to protect minority shareholders' rights, but to secure the position of Chairman Choi, who holds only a minority stake.

The events of this extraordinary general meeting have made it even clearer that Young poong, the majority shareholder of Korea Zinc, and MBK Partners must strengthen their control over the company in order to achieve governance improvements.

The results of this extraordinary general meeting of Korea Zinc, marked by various illegal and unlawful actions, are completely null and void. Young poong and MBK Partners will hold Korea Zinc and its current management accountable for thoroughly deceiving shareholders and the South Korean capital market, as well as for engaging in illegal and unlawful conduct.

Young Poong Corporation