MBK Partners, at the center of the management rights dispute with Korea Zinc, has expressed opposition to the introduction of the cumulative voting system.
MBK Partners noted in a press release on the 29th, "We clearly oppose the introduction of the cumulative voting system, which is aimed at extending the position of Chairman Choi Yun-bum rather than protecting minority shareholders."
The cumulative voting system is a method that grants voting rights equivalent to the number of directors to be appointed for each share when electing directors. This method was proposed by Yumi Development, a shareholder that is set to be included in next month's agenda for the extraordinary general meeting.
Yumi Development, a building management company, is a major shareholder holding approximately 1.5% of Korea Zinc's equity, and it is also seen as an ally of Chairman Choi. Chairman Choi's mother, Yu Jung-geun, is the controlling shareholder.
MBK Partners believes that Chairman Choi is trying to prevent the securing of a majority on the board of directors for the alliance of MBK Partners and Youngpoong by misusing the cumulative voting system to secure nearly half of the voting rights.
Korea Zinc has put forth the appointment of 14 directors as an agenda, with the cumulative voting system providing 14 voting rights per share if introduced. This could allow for votes to be concentrated on a specific director candidate.
MBK Partners criticized, "The introduction of the cumulative voting system to preserve Chairman Choi's position undermines the original intention and purpose of the cumulative voting system," and added, "He is abusing the system to maintain his position."
MBK Partners continued, "It is not that we oppose the cumulative voting system itself," and stated, "If the board of directors of Korea Zinc is normalized and the governance structure is improved, we can consider adopting the cumulative voting system."