Korea Zinc issued a correction disclosure on the amount of new shares to be issued in connection with a large third-party allotment paid-in capital increase to fund construction of a smelter in the United States.
On the 31st, according to the Financial Supervisory Service's electronic disclosure system, the day before, Korea Zinc filed a correction disclosure stating that the total amount of new shares to be issued in the capital increase was reduced by 17.2 billion won, from 2.8508 trillion won to 2.8336 trillion won.
Korea Zinc said the reason for the correction disclosure was that "as of the 26th, the payment date for the capital increase, the initial posted exchange rate for trading of 1,460.60 won per U.S. $1 was applied, and thus the final issuance amount was adjusted," adding, "the previous aggregates was the amount based on the won-dollar rate of 1,469.50 won on the 12th, the business day immediately before the board meeting."
This measure followed Young Poong and MBK raising issues with Korea Zinc's capital increase disclosure the day before. Young Poong and MBK argued that applying the exchange rate on the actual payment date of the paid-in capital on the 26th means the amount Korea Zinc actually received fell below the statutory floor for the issue price, constituting a violation of the Financial Investment Services and Capital Markets Act.
Korea Zinc pushed back. It argued that the board of directors fixed the issue price in U.S. dollars and finalized the class and number of new shares to be issued, and that the total issuance amount to be paid on the payment date—calculated by multiplying the issue price by the number of shares to be issued—was also fixed in U.S. dollars at the time of the board resolution.