The proposal to introduce a concentrated voting system at Korea Zinc passed at the extraordinary general meeting of shareholders on the 23rd. However, the election of directors through the concentrated voting method will only be possible from the next shareholder meeting.
At the extraordinary general meeting of Korea Zinc held that afternoon at the Grand Hilton in Jung-gu, Seoul, the first item on the agenda, which was a proposal to amend the articles of incorporation to introduce a concentrated voting system, was approved.
The proposal to amend the articles of incorporation to introduce a concentrated voting system is subject to the so-called '3% rule,' which limits the exercise of voting rights to 3% of the total number of issued shares, regardless of how much equity a shareholder holds.
At that meeting, the number of shares eligible to exercise voting rights for agenda item 1-1 was 9,969,074 shares, of which the attending shareholders held 9,016,432 shares. Originally, among Korea Zinc's issued shares, the shares with voting rights, excluding Young Poong's equity holdings, were 12,901,207 shares, but due to the application of the 3% rule, the number of shares restricted from exercising voting rights reached 3,141,926 shares.
According to Korea Zinc, among the 9,016,432 shares, 6,896,228 shares voted in favor of agenda item 1-1, which corresponds to 76.4% of the shares held by attending shareholders. Because the special resolution requirement for amending the articles of incorporation (approval of more than 67% of the attending shares) was met, the proposal to introduce the concentrated voting system was approved.
The extraordinary general meeting was scheduled to start at 9 a.m. that day but began in the afternoon due to issues such as duplicate proxies. Young Poong's voting rights were restricted because Chairman Choi's side formed a circular investment structure between affiliates the day before, preventing Young Poong from exercising voting rights as a shareholder of Korea Zinc. Korea Zinc has 100% control over its subsidiary, Sunmetal Corporation (SMC), through its Australian intermediate holding company, Sunmetal Holdings, which acquired a 10.33% stake in Young Poong from the Choi family and Young Poong Precision Corporation.
As a result, Korea Zinc and Young Poong ended up holding more than 10% of each other's equity. Young Poong already holds a 25.42% stake in Korea Zinc (based on the number of issued shares). According to Article 369, Paragraph 3 of the Commercial Act, if two corporations hold more than 10% of each other's equity, they are prohibited from exercising voting rights against each other.
Although agenda item 1-1 was approved and the concentrated voting system was introduced that day, it will not be possible for Korea Zinc to elect directors through the concentrated voting method until the next shareholder meeting. This is because the Seoul Central District Court ruled on the 21st that electing directors using the concentrated voting method at this meeting was unlawful. The MBK-Young Poong side, which expressed its stance that it cannot agree to the restriction of voting rights, is expected to file a motion to stay the effect of the decisions made at the shareholder meeting that day and aims to re-pursue the election of directors using a simple voting method rather than a concentrated voting method at the regular shareholder meeting in March.