Young Poong and MBK Partners on the 5th said they are concerned about the preliminary independent outside director candidate recommendation process announced recently by the Korea Zinc board. They said the eligibility to recommend candidates is effectively limited to parties friendly to Chair Choi Yun-beom's side. In response, Young Poong and MBK said they will publicly solicit independent outside director candidates from outside, including all Korea Zinc shareholders.
That day, Young Poong and MBK said in a statement, "We question whether this process fully embodies the purpose of the system to expand shareholder participation," and argued, "The procedure for recommending independent outside director candidates who will serve as separately elected audit committee members must above all be conducted openly and transparently."
Korea Zinc's announced eligibility to recommend independent outside director candidates is a shareholder who has held at least 0.1% of the total number of issued shares for six months or more, or a shareholder who holds at least 1% of the total number of issued shares.
Regarding this condition, Young Poong and MBK said, "On the surface, it purports to be a public call for shareholder recommendations, but in reality the shareholders who can participate are extremely limited," adding, "As of the end of March 2026, there are only 47 shareholders on a de facto basis who hold equity stakes of 0.1% or more, and many of them share interests with major shareholder groups or the company."
They continued, "If the six-month holding requirement is also considered, the parties that can recommend candidates on behalf of general shareholders become even more limited," explaining, "That is, excluding Hanwha Group and Mirae Asset, which can be seen as friendly shareholder groups to Director Choi Yun-beom's side, there are only two to three institutions that meet the eligibility as shareholders who can independently recommend outside director candidates separate from the No. 1 and No. 2 shareholders."
The current conflict is related to the situation in which Korea Zinc must appoint one additional separately elected audit committee member. The second amendment to the Commercial Act, which expands the number of separately elected audit committee members to at least two, takes effect on the 9th. Currently, the Korea Zinc board has one separately elected audit committee member. With an extraordinary shareholders meeting unavoidable, the two sides are engaged in a numbers game.
Accordingly, Young Poong and MBK said, "We intend to pursue a more open and reliable procedure for recommending independent outside director candidates," and added, "We will not recommend our own personnel as candidates in connection with the appointment of the separately elected audit committee member this time." They continued, "Instead, we seek to publicly receive recommendations for independent outside director candidates from all shareholders who hold at least one share of Korea Zinc stock, as well as from public-interest institutions and expert groups that have worked to improve corporate governance."
Young Poong and MBK said, "The board must not become the exclusive domain of a particular group," and explained that they plan to transparently vet the recommended candidates and go through the shareholder proposal process.
The vacancy created by outside director resignations is also a seed of further dispute. Earlier, four Korea Zinc outside directors — Lee Sang-hun, Lee Hyeong-gyu, Kim Kyung-won and Lee Jae-yong — voluntarily resigned, creating vacancies on the board. They were appointed at Korea Zinc's extraordinary shareholders meeting in Jan. 2025, but their duties were suspended following a court finding that the meeting had procedural issues. It was reported that they resigned voluntarily because performing their duties was effectively difficult.