The battle between Korea Zinc and MBK Partners and Young Poong over management control is intensifying ahead of Korea Zinc's extraordinary shareholders meeting scheduled for next month. With the meeting to appoint the board approaching, both sides appear to be pouring efforts into a public campaign to win shareholder votes.
On the 20th, Korea Zinc issued a rebuttal to MBK Partners' claim that the explanatory materials for agenda items at Korea Zinc's extraordinary shareholders meeting on Aug. 9 contain false information.
Earlier, MBK said there were false entries in the explanatory materials for Korea Zinc's extraordinary shareholders meeting agenda and demanded their deletion, warning of legal action.
MBK sent an official letter to Korea Zinc saying, "Regarding the management activities of professional management at MBK Partners' portfolio corporations, the objective facts were intentionally excluded and selectively and biasedly presented in a distorted manner." It added, "If the false materials are not immediately deleted and improper proxy solicitation continues, we will take all possible legal measures to protect shareholder rights and market confidence."
The explanatory materials for the extraordinary meeting posted by Korea Zinc included information on MBK's management style and the financial conditions of corporations after acquisition by MBK. Through the materials, Korea Zinc cited MBK's acquisition cases and said, "MBK's management style is focused on short-term recovery of investment funds rather than long-term corporate value enhancement," adding, "This could lead to a significant risk of corporate value damage."
In response to MBK's claim of false statements, Korea Zinc said, "We presented, based on already disclosed facts, the claims, controversies, concerns, and evaluations that have been raised by the media and the market," adding, "This is to provide shareholders with the disclosed facts and the market's assessment of them, and it does not fabricate new facts without basis or present them as if they were confirmed facts."
Korea Zinc also maintains that the management performance of corporations invested in by MBK is relevant to the shareholders meeting. Korea Zinc said the core agenda of this extraordinary meeting is the composition of the board, and explaining what management performance has appeared at corporations invested in by MBK is necessary for shareholders' judgment.
At this meeting, amendments to the articles of incorporation and the appointment of Audit Committee Commissioners are being pursued. Specifically, agenda items to be handled include "amendments to the articles of incorporation to expand separately elected Audit Committee Commissioners," "appointment of four independent directors by cumulative voting," and "appointment of one independent director to serve as an Audit Committee Commissioner."
The appointment of independent directors will apply the "cumulative voting system." It is a system that grants shareholders voting rights equal to the number of directors when appointing two or more directors. Each side has nominated two candidates.
The appointment of an independent director who will serve as an Audit Committee Commissioner will apply the "3% rule." It is a system that recognizes only up to 3% of the combined voting rights of the largest shareholder and related parties. With the controlling shareholder's voting rights restricted, the votes of general shareholders and institutional investors become more important.
Meanwhile, Korea Zinc Chair Choi Yoon-beom and Young Poong and MBK, the largest shareholders of Korea Zinc, have been engaged in a management control dispute since 2024.