On the 28th, the regular shareholders' meeting of Korea Zinc concluded with the victory of Chairman Choi Yun-beom's side, while the largest shareholder Young Poong-MBK Partners hinted at taking legal action again. They are monitoring the results of an immediate appeal regarding the dismissal of the injunction allowing voting rights and are considering applying for an injunction to suspend the effectiveness of the regular shareholders' meeting resolutions.
At the regular shareholders' meeting of Korea Zinc held that day at the Mondrian Hotel in Yongsan District, Seoul, five candidates from the incumbent management, led by Chairman Choi, including Park Gi-deok, CEO of Korea Zinc, Professor Kim Bo-young from Hanyang University, lawyer Kwon Soon-beom, James Andrew Murphy, former chief of staff to the Premier of Queensland, and Professor Jeong Da-mi from Myongji University, were elected to the board.
Among the candidates from the Young Poong-MBK side, three were appointed. Kim Kwang-il, vice chairman of MBK Partners, and Kang Seong-du, president of Young Poong, along with Kwon Kwang-seok, a former CEO of Woori Bank who ran as an outside director candidate, were elected to the board.
Including the existing directors, there are a total of 10 directors from Chairman Choi’s side and 4 from the Young Poong-MBK side. Although Young Poong’s voting rights are limited to 25%, and the Young Poong-MBK alliance is at a disadvantage, the use of a cumulative voting method allowed the Young Poong-MBK side to successfully elect their preferred candidates to the board. That day, Korea Zinc appointed directors based on the number of votes received, with Kang Seong-du and Kim Kwang-il ranking 7th and 8th, respectively.
On that day, Young Poong-MBK stated, "The regular shareholders' meeting of Korea Zinc was disrupted due to another illegal act by Chairman Choi, as feared," and criticized, "Once again, Chairman Choi's side utilized the company’s assets for personal purposes without any regard, infringing on the rights of shareholders."
The previous night, Young Poong held a shareholders' meeting and unexpectedly distributed dividends of 0.04 shares per common stock. Originally, Young Poong's total number of issued shares was 1,842,040, and Korea Zinc's Australian company Sun Metal Holdings (SMH) owned 190,226 of those shares; however, due to this dividend, an additional 68,805 new shares were issued, causing SMH's stake in Young Poong to fall below 10%. The Young Poong-MBK alliance argued that, since the mutual share relationship between Young Poong and Korea Zinc was dissolved, restricting Young Poong's voting rights was illegal.
However, Chairman Choi’s side struck back by immediately raising SMH's stake in Young Poong above 10%. SMH acquired 1,350 shares of Young Poong from Kjet Precision at a price of 444,000 won per share. SMH's stake in Young Poong increased again to 10.03%, and Park Gi-deok, CEO of Korea Zinc, who chaired the shareholders' meeting, used this as a basis to restrict Young Poong's voting rights.
A representative from Young Poong-MBK said, "The shareholders' meeting of Korea Zinc, deprived of the basic rights of shareholders due to Chairman Choi's illegal and unlawful acts, will be recorded in history as a disgrace and stain on the Korean capital market," and emphasized, "All shareholders of Korea Zinc witnessed the infringement of their properties and fundamental rights due to an individual's excessive greed at a shareholders' meeting of a listed company that is one of South Korea's national core industries and has a market capitalization of 15 trillion won."
They added, "Young Poong and MBK will utilize all available methods, including immediate appeals and suspensions, regarding the distorted results of the regular shareholders' meeting, and seek to correct the distorted will of shareholders in court."
The previous day, the 50th Civil Division of the Seoul Central District Court recognized the mutual share relationship between Young Poong and Korea Zinc and judged that "Young Poong cannot exercise voting rights at Korea Zinc's regular shareholders' meeting," prompting Young Poong-MBK to file an immediate appeal.
Young Poong-MBK is preparing to submit an injunction to suspend the effectiveness of the resolutions of the extraordinary shareholders' meeting while awaiting the results of the immediate appeal. The suspension of effectiveness can be applied for separately for each agenda item.