This article was published on Dec. 24, 2025, at 5:28 p.m. on the ChosunBiz MoneyMove site.
The battle over control of Korea Zinc between Chairman Choi Yoon-beom and the Young Poong-MBK Partners alliance has become unpredictable. Chairman Choi succeeded in attracting the U.S. government as a friendly shareholder by deciding to build a smelter in the United States.
The court found there was no guarantee the U.S. government would act as Chairman Choi's white knight, but industry sources say that amid a control dispute at Korea Zinc that has lasted more than a year, the U.S. government has emerged as Chairman Choi's strongest friendly shareholder. Young Poong-MBK and Chairman Choi's camp are expected to fight a third round at the regular shareholders meeting in March next year, holding a difference of 2–3% in equity by voting rights.
According to investment bank industry sources on the 24th, as Korea Zinc's third-party allotment rights offering to the U.S. government became legally possible that day, the voting-rights equity ratio of Chairman Choi, his special related parties and friendly shareholders rose sharply from 31.3% to 38.8%. Young Poong-MBK's voting-rights equity ratio, which stood at 47.2%, is estimated to be adjusted to 42.1% after the capital increase.
The Seoul Central District Court's Civil Division 50 (Presiding Judge Kim Sang-hoon) dismissed Young Poong-MBK's provisional injunction request to prohibit Korea Zinc from issuing new shares. As a result, Korea Zinc will be able to establish a joint venture (JV) with the U.S. government worth 2.85 trillion won on the 26th and carry out a third-party allotment rights offering to the JV. Consequently, the U.S. government will indirectly hold about 10% of Korea Zinc through the JV.
If this capital increase is completed, the total number of Korea Zinc shares will increase by about 2.2 million shares. After the capital increase, the number of voting shares (excluding treasury shares) will be 20,393,232 shares.
After the capital increase, adding the JV's stake (10.8%) to the voting-rights equity ratios of the Choi family (18.1%), Hanwha (7.9%) and LG CHEM (1.9%) produces a calculation that Chairman Choi's friendly stake approaches a total of 38.8%. However, the current shareholdings of Hanwha and LG CHEM have not been disclosed and could change. There is also speculation that the voting-rights equity ratio could exceed 39% because there are other undisclosed friendly shareholders.
Young Poong-MBK's voting-rights equity ratio is estimated to be 42.1% after the capital increase. The issuance of 2.2 million new shares will significantly dilute the holdings of existing shareholders. The gap in voting-rights equity between Young Poong-MBK and Chairman Choi's camp will narrow from the previous 15.9% to 2–3%.
Ultimately, both sides will have to court the votes of foreign institutions classified as 'swing voters' and the National Pension Service (5.3%) ahead of the regular shareholders meeting in March next year.
At the special shareholders meeting earlier this year, of Korea Zinc's 12.5% swing voters, 7% were foreign institutions and 4.5% were the National Pension Service. The share of individual and domestic institutions was negligible.
By successfully bringing the U.S. government on as a friendly shareholder, Chairman Choi can at least breathe a sigh of relief ahead of the regular shareholders meeting in March next year.
The current Korea Zinc board of directors is composed of 11 members aligned with Chairman Choi and four members aligned with Young Poong-MBK.
The directors whose terms expire on March 16 next year are Chairman Choi, CEO Jung Tae-woong, Young Poong advisor Jang Hyung-jin, outside director and board chair Hwang Deok-nam, outside director Kim Do-hyun and outside director Lee Min-ho, six people in all. Except for Advisor Jang, the other five are all aligned with Chairman Choi.
The industry expects a fierce head-to-head vote between the two sides for five of the six board seats at next year's regular shareholders meeting, excluding the one seat allocated to the United States. The cumulative voting system is likely to be a variable.