According to the financial investment industry on the 9th, the Financial Supervisory Service (FSS) has found violations of the Capital Markets Act by MBK Partners and reportedly referred the matter to the prosecution for investigation at the end of last year. The current management of Korea Zinc, the YP and MBK alliance pursuing a hostile merger and acquisition (M&A), is facing a vote showdown to seize control of the board at an extraordinary shareholders' meeting on the 23rd.
The previous day, a report emerged from one media outlet linking allegations to the Korea Zinc management dispute, but it was noted that this aspect is unrelated. An FSS official said, “Korea Zinc spread unfounded facts that MBK and YP had been referred to the prosecution, and this itself raises the possibility of a separate violation of the Capital Markets Act, so we will review an investigation.”
Korea Zinc had previously filed a complaint with the Financial Supervisory Service (FSS) regarding the YP and MBK alliance engaged in a hostile merger and acquisition (M&A), alleging market manipulation and unfair transactions, summarizing nine points.
First, Korea Zinc suspects that MBK Partners utilized consulting materials related to its new business, Troika Drive, in the management dispute, whereas MBK Partners strongly countered that such sharing did not occur due to a 'Chinese wall' blocking inter-departmental information exchange.
Furthermore, on October 14 of last year, the last day of the public tender offer from MBK and YP, circumstances were included in the complaint regarding a mysterious mass sell-off that caused stock prices to fall close to the suggested public tender price (830,000 won). Korea Zinc reported that the stock price dropped to the mid-700,000 won range, creating favorable conditions for MBK and YP to secure more equity.
MBK Partners denied, stating, “We have not engaged in unfair trading or utilized undisclosed information from Troika Drive,” adding, “We have not been investigated by financial authorities, so this is unfounded speculation.”
Meanwhile, the FSS has previously referred to the prosecution an incident on October 30 of last year, where Korea Zinc conducted a public tender offer while planning a paid-in capital increase and did not reflect this in the securities registration statement.