Korea Zinc stressed that a court ruling finding illegal the measure to restrict the voting rights of its largest shareholder, Young Poong, at last year's extraordinary general meeting of shareholders was "a determination limited to the extraordinary shareholders' meeting in January last year and has no impact on the current governance structure."
According to the industry on the 13th, the Civil Division 17 of the Seoul Central District Court (Presiding Judge Jang Ji-hye) on the 10th ruled partly in favor of the plaintiffs in a damages suit filed by Young Poong and MBK Partners' Korea Corporate Investment Holdings against Korea Zinc CEO Park Ki-deok. The court found that Park must pay 100 million won and delayed damages to Young Poong.
The lawsuit concerns the measure to restrict Young Poong's voting rights after Sun Metals Corporation (SMC), Korea Zinc's Australian second-tier subsidiary, held more than 10% of Young Poong's shares ahead of the extraordinary shareholders' meeting in January 2025, with Korea Zinc determining that a cross-shareholding relationship had been formed under the Commercial Act.
Korea Zinc said the ruling aligns with the thrust of the first- and second-instance decisions in the prior injunction cases over the extraordinary shareholders' meeting, which found it difficult to conclude that SMC is the same type of company as a stock company under the Commercial Act. The company argued that even though the matter underwent review by outside legal experts, the court saw fault in Park, as the chair of the shareholders' meeting, for restricting Young Poong's voting rights, but did not conclude it was an intentional tort.
Korea Zinc said, "Contrary to the assertions by Young Poong and MBK, it was not concluded that the voting rights restriction was an intentional tort," and added that the damages claim by Korea Corporate Investment Holdings, which filed the suit alongside Young Poong, was entirely dismissed. It also argued, "The Young Poong–MBK side is omitting the core elements of the ruling and is exaggerating only part of it to once again sway public opinion."
Korea Zinc maintains that SMC issues shares and bears limited liability by shares, satisfying the essential requirements of a stock company under the Commercial Act. The company plans to continue substantiating this in the re-appeal phase of the injunction case to suspend the effect of the extraordinary shareholders' meeting resolution, which is under review at the Supreme Court. Park also plans to appeal the first-instance damages ruling.
Separately, Korea Zinc emphasized that an injunction request by the Young Poong–MBK side to allow the exercise of voting rights at the regular shareholders' meeting in March last year was finally dismissed by the Supreme Court in April this year. Korea Zinc said, "The act of restricting Young Poong's voting rights, based on the cross-shareholding formed through the acquisition of Young Poong equity by Australian subsidiary SMH, received final recognition for its legality and legitimacy from the Supreme Court."