Choi Yun-beom, chairman of Korea Zinc, succeeded in defending management rights by using the 'limitation of voting rights for mutual stocks' card at the extraordinary shareholders' meeting held on the 23rd. He attracted attention by selecting the Sun Metals Corporation (SMC) in Australia among several overseas subsidiaries and affiliates. Korea Zinc is seen as having chosen the most suitable company based on factors such as operational history, sales, and business significance. Although Chairman Choi has successfully defended management rights for now, the alliance of MBK Partners and Young Poong, which aim for management rights in Korea Zinc, has hinted at future legal disputes, suggesting that the future of management rights may depend on the court's judgment.
At the extraordinary shareholders' meeting, Korea Zinc passed all proposed agendas, including the introduction of a concentrated voting system, setting limits on the number of directors, and appointing directors. All the agendas proposed by MBK and Young Poong were rejected. This was because Korea Zinc did not recognize the voting rights of Young Poong's 25.42% equity stake in Korea Zinc. The current Commercial Act stipulates that corporations that hold more than 10% of each other's shares cannot exercise voting rights against each other. Korea Zinc holds 100% equity in SMC, which secured a 10.33% equity stake from Young Poong on the 22nd, a day before the extraordinary shareholders' meeting.
SMC is regarded as having the longest operational history and significant business weight among the overseas subsidiaries controlled by Korea Zinc. Established in 1997 in Townsville, Queensland, Australia, SMC is a zinc smelting company that produces approximately 220,000 tons of zinc annually. Korea Zinc produces 550,000 tons of zinc at its Onsan smelter, while Young Poong produces 360,000 tons at its Seokpo smelter. The collective zinc production of the three companies accounts for about 10% of the global zinc demand.
SMC's parent company, Sun Metals Holdings (SMH), was established in 1991. As of the end of June last year, its assets were approximately 3 trillion won (with capital of 1.8342 trillion won and liabilities of 1.1887 trillion won), and its sales were recorded at 457.6 billion won. Other subsidiaries, such as the Australian renewable energy company Arc Energy (2021), the logistics company Townsville Logistics (2016), and the American Pedal Point (2022), have shorter operational histories and are smaller in asset size compared to SMH.
The owner family of Korea Zinc has also invested efforts into the SMC business. After joining the company, Chairman Choi Yun-beom served as CEO of SMC for five years starting in 2014, after going through the Onsan smelter. Choi Joo-won, the son of Choi Chang-kyu, CEO of Young Poong Precision Corporation and cousin of Chairman Choi, also served as the Chief Financial Officer (CFO) of SMC.
Korea Zinc is expanding its renewable energy business centered around the Australian SMC. As the management rights dispute intensified last September, SMC took steps to cultivate public opinion in support of Chairman Choi, focusing on local regions and official relationships in Australia.