Young Poong and MBK Partners pushed back against Korea Zinc's plan to build a smelter in the United States, calling it "a serious matter that could damage shareholder value and worsen financial stability," and said on the 15th they plan to file for an injunction with the court to ban the issuance of new shares.
Young Poong and MBK argued that Korea Zinc's move to establish a joint venture by pooling investment from the U.S. government and corporations, and then have the joint venture participate in Korea Zinc's third-party allocation paid-in capital increase, is highly unusual, and said it is hard to dispel the reasonable suspicion that this is an intervention in governance to secure friendly equity amid a management control dispute rather than for funding purposes.
They added, "The paid-in capital increase is judged to be an illegal act that infringes shareholders' preemptive rights and causes significant damage to the company," and noted, "Through legal action, we will make sure to correct this decision and do everything we can to ensure Korea Zinc remains a corporation trusted by shareholders, partners, and the national industry as a whole, rather than the private property of Chair Choi Yoon-beom."
Earlier, Korea Zinc decided to set up a joint venture with the U.S. government and corporations and invest 10.9 trillion won to build a smelter in Tennessee. Funding will be raised through a third-party allocation paid-in capital increase, with strategic investors such as the U.S. Department of Defense and Department of Commerce and defense strategic corporations participating. Once the paid-in capital increase is completed, the joint venture will secure about 10% equity in Korea Zinc.