A court ordered Korea Zinc to submit documents related to investments in One Asia Partners funds.
According to legal sources on the 27th, the Seoul Central District Court on the 21st ordered Korea Zinc to submit internal documents related to One Asia Partners' "Korea Growth No. 1" and "Arbitrage No. 1" funds in shareholder derivative suits involving One Asia and Ignio.
One Asia Partners CEO Ji Chang-bae is known to be close to inside director Choi Yoon-beom. Cheongho Comnet, in which Chair Choi acquired equity through a private investment association, was also a company run by Ji.
Young Poong and MBK Partners said, "Right after Director Choi acquired Cheongho Comnet equity through the private investment association (Yerigo No. 1), Korea Zinc committed capital to Korea Growth No. 1, and we note that some of that fund's money later flowed to Cheongho Comnet," adding, "This flow of funds may go beyond a simple investment loss and may not be unrelated to the alignment of interests between Director Choi and Ji."
According to Young Poong and MBK Partners, Ji was convicted on charges including transferring Korea Growth No. 1 fund money to an outside corporation and then lending it back to Cheongho Enterprise. Young Poong and MBK Partners view the structure as one in which, in effect, fund money committed by Korea Zinc led to relieving Cheongho Comnet's debt burden.
Young Poong and MBK Partners said, "The court's order to submit documents recognizes the need for materials to confirm the investment process in One Asia Partners' funds and the internal decision-making history," adding, "We expect to confirm what review and approval steps were taken in executing funds for the funds in which Korea Zinc participated as the de facto largest and sole limited partner."
Korea Zinc, for its part, said, "All investments and capital commitments are conducted lawfully in accordance with relevant laws and the company's internal procedures," adding, "Investing a portion of held cash in financial products, including bonds and funds, is a revenue diversification strategy and an asset management method that can be seen at many corporations."