Young Poong and MBK Partners again called for an independent probe into what they called Director Choi Yoon-beom and his family's alleged "invest first, recoup first." They said the One Asia Partners fund, backed by Korea Zinc, made follow-on investments in unlisted corporations first backed by Choi's family, and that Choi's family recouped their money before Korea Zinc.
Young Poong and MBK issued a statement on the 7th saying that from 2019 to 2023, when Choi served as CEO of Korea Zinc, Choi's family first invested personal funds in some unlisted corporations, after which Korea Zinc injected capital into those corporations through funds.
Young Poong and MBK cited Arc Media, HiHat, and Slingshot Studio as examples. They said the pattern repeated in which the One Asia Partners fund backed by Korea Zinc made follow-on investments after Choi's family invested first.
They also stressed that Korea Zinc effectively participated as the sole limited partner in 6 of the 8 funds formed by One Asia Partners, committing a total of 560 billion won. The MBK side added, "It cannot be a coincidence that funds worth tens of billions of won repeatedly back the steps of the CEO personally and relatives," and, "It is something unlikely to occur based on the independent judgment of the general partner (GP) and is an undeniable truth supported by multiple objective pieces of evidence."
They also emphasized indications that Korea Zinc first acquired corporate bonds of Cheongho ComNet handled by Ji Chang-bae, head of One Asia Partners, and that money from a One Asia fund backed by Korea Zinc was then used for repayment of those bonds.
Regarding the Arc Media investment, they took issue with how Choi's family recouped their investment. They claimed Choi's family first invested in Arc Media's convertible bonds (CB), after which a One Asia fund made a follow-on investment, and that while Arc Media's losses were accumulating, Choi's family did not convert the CBs into shares but instead recovered principal and interest.
Young Poong and MBK also again challenged Korea Zinc's rebuttal that there had never been a loss in valuation versus acquisition cost related to Arc Media and other investments by the One Asia fund. They said that if there was no loss, Korea Zinc must explain why Choi's family recouped their investment instead of converting the CBs into common stock to gain revenue from a rise in equity value.
Young Poong and MBK demanded that Korea Zinc's audit committee conduct an independent investigation into the matters. They said they had called for the audit committee to look into issues related to One Asia Partners, Ignio Holdings, and Cheongho ComNet, but that Korea Zinc kept repeating the position that it was not desirable for the company to conduct its own probe.
Young Poong and MBK said, "It must be clarified how the One Asia fund made follow-on investments in corporations first backed by Director Choi Yoon-beom's family and whether Korea Zinc's internal controls and board properly reviewed potential conflicts of interest." They added, "They must also answer who will be responsible and how, for the process in which Choi's family recouped their investment first while Korea Zinc was left facing loss risks."
Korea Zinc countered that Young Poong and MBK are distorting facts and waging a public campaign ahead of an extraordinary shareholders meeting.
In a statement, Korea Zinc stressed that decisions on whether the One Asia Partners fund invests are made independently by the GP after investment review and due diligence. Korea Zinc said it is only a limited partner (LP) in the fund and did not take part in individual investment decisions.
On accounting treatment, it acknowledged that the Securities and Futures Commission under the Financial Services Commission pointed out errors regarding the timing of value assessments of investment assets and recognition of impairment losses, but argued that linking this to embezzlement, breach of trust, or private benefit by the current management is a distortion of facts.
Korea Zinc said the audit committee held several meetings on the matters to review materials and, after the SFC action, separately examined related issues and measures through an external law firm. It also countered that Young Poong and MBK's claim that the audit committee took no action is not true.
Korea Zinc said Young Poong and MBK are repeatedly raising suspicions without objective grounds and that it will respond, including with legal action, to acts that damage the company's reputation and corporate value using unverified suspicions or unconfirmed materials.
The clash between the two sides is intensifying ahead of Korea Zinc's extraordinary shareholders meeting on the 9th. At this meeting, a proxy fight is set between Director Choi Yoon-beom's side and the Young Poong–MBK side over the appointment of four independent directors and one independent director to serve on the audit committee.