Advisor Jang Hyung-jin Demands Increased Dividends from Korea Zinc
Yeongpung Freezes 17.2 Billion Annually Since 2016
Korea Zinc "Raises Shareholder Return Rate to 76.3%"
Yeongpung, which demanded that Korea Zinc increase cash dividends by more than 100 billion won, has maintained a freeze on dividends from its headquarters for eight years. Yeongpung cited 'shareholder returns' as the basis for demanding increased dividends from Korea Zinc, leading to criticism that this is a case of double standards.
According to related industries and the electronic disclosure system on the 6th, Yeongpung plans to propose an agenda at the shareholders' meeting scheduled for the 20th to confirm a year-end dividend of 10,000 won per common share. The total dividend amount is 17.2 billion won, with a dividend yield of 1.9%.
Yeongpung's total dividend amount has remained consistent for eight years since 2016. Yeongpung recorded a net profit of 415.6 billion won in 2022 but turned to a deficit of 83 billion won last year. However, the dividend amount remained the same at 10,000 won per share. While it can be positively evaluated that dividends were paid even during poor performance, demanding other companies to increase dividends is considered unreasonable.
It is reported that Yeongpung strongly demanded dividend expansion at the Korea Zinc board of directors meeting.
Last month, Yeongpung advisor Jang Hyung-jin attended the Korea Zinc board meeting and read a statement saying, "Yeongpung plans to submit a revised agenda to pay 10,000 won per common share as dividends," and "We oppose Korea Zinc's dividend proposal and request support for Yeongpung's revised agenda." This expression of opposition triggered discord in the 'two families under one roof' partnership that has lasted for about 70 years.
Industry insiders analyze that dividends from Korea Zinc are important to the Jang family. Increasing dividends helps Yeongpung's performance as well. Yeongpung recorded operating losses three times in 2018, 2021, and last year. However, it has maintained net profit surpluses through dividends from Korea Zinc.
Regarding the dividend issue, Yeongpung stated, "We have consistently paid dividends and maintained the dividend scale even during deficits," adding, "Criticizing our dividends while Korea Zinc reduces theirs is an attempt to deflect responsibility."
Korea Zinc emphasized that it has increased its shareholder return ratio to over 50% for two consecutive years recently and is maintaining that level this year as well. A company official rebutted, "Including an interim dividend of 10,000 won and the cancellation of 100 billion won worth of treasury shares, the shareholder return ratio rose significantly to 76.3% compared to 50.9% last year."
Yeongpung also opposes Korea Zinc's proposed amendment to its articles of incorporation, but it was found that this was already reflected in Yeongpung's own articles in 2019. Korea Zinc is proposing at this shareholders' meeting to delete the clause on third-party allotment rights for new shares that restricts rights to foreign joint ventures only, and to amend the articles to allow domestic corporations to also receive new shares through rights offerings and general public offerings.
Five years ago, Yeongpung amended its articles of incorporation to state, "To achieve the company's management objectives such as introducing new technologies and improving financial structure, the company may grant opportunities to subscribe for new shares to specific parties when necessary."
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