This article was posted on Nov. 4, 2025, at 12:17 p.m. on the ChosunBiz MoneyMove site.
Prosecutors have launched a compulsory investigation into whether there were violations of the Financial Investment Services and Capital Markets Act during Korea Zinc's pursuit of a paid-in capital increase last year, and it has been confirmed that they are investigating circumstances suggesting Korea Zinc planned a paid-in capital increase before starting a tender offer for its treasury shares. Legal circles say that if these circumstances are proven true, the likelihood that Korea Zinc intentionally concealed the paid-in capital increase plan could increase. If a paid-in capital increase is carried out, the stock price could fall, causing losses for existing shareholders.
On the 4th, according to investment banks and legal sources, the Seoul Southern District Prosecutors' Office's Financial and Securities Crime Joint Investigation Unit (Director General Kim Jin-ho) said that that morning it was conducting searches and seizures at some departments of Korea Zinc, KB Securities, Mirae Asset Securities and Hana Bank in relation to an unfair trading case involving Korea Zinc that had been referred by the Financial Services Commission (FSC). This is the second time prosecutors have carried out searches and seizures related to Korea Zinc's paid-in capital increase since April.
Earlier, Korea Zinc conducted a tender offer for its treasury shares from Oct. 4 to Oct. 23 last year while engaged in a management rights dispute with Young Poong and MBK Partners. But seven days later, on Oct. 30, it announced plans for a paid-in capital increase of 2.5 trillion won, which raised concerns. At the time, Mirae Asset Securities and KB Securities were the tender offer managers and the firms arranging the paid-in capital increase subscription.
The industry is paying attention to the fact that Hana Bank was included among the targets of the recent searches and seizures. Hana Bank was not a target during the first search and seizure in April.
Hana Bank was the institution that provided a bridge loan on Oct. 2 last year for Korea Zinc's tender offer for its treasury shares. At the time, Korea Zinc raised funds for the tender offer through borrowing without breaking discretionary reserves.
Prosecutors are reported to have seized and searched loan contract–related materials from Hana Bank this time to verify whether Korea Zinc planned the paid-in capital increase from the early stages of its tender offer for treasury shares.
A Hana Bank official said, "Our bank is a witness, and we understand prosecutors came to verify facts and materials related to Korea Zinc. We will sincerely provide explanations."
Named as witnesses were loan contract officers from Hana Bank's IB Group investment finance headquarters. Korea Zinc as a corporation, Chairman Choi Yun-beom of Korea Zinc, CEO Park Ki-deok of Korea Zinc, Chief Financial Officer Lee Seung-ho, and senior member of the finance team Kang Won-seok were included as suspects.
A lawyer specializing in capital markets said, "Korea Zinc has maintained that the timing overlap of the tender offer for treasury shares and the paid-in capital increase was accidental, and if it truly was an accident, it could end as merely a disclosure violation. However, if it is revealed that the paid-in capital increase was planned before the tender offer, it will be difficult to argue there was no intent, and furthermore, Chairman Choi Yun-beom, who decided on the tender offer, could face allegations of fraudulent unfair trading committed intentionally."