Korea Zinc's 150 Billion Won Share Buyback... Youngpoong "Concerns Over Management's Increased Stake"

After Korea Zinc announced its decision to repurchase treasury shares worth 150 billion KRW for shareholder returns, its largest shareholder, Young Poong, opposed the move, expressing concerns that it might be used to increase the current management's shareholding.

On the 19th, shareholders entered the 'Korea Zinc Annual General Meeting' held at the Yeongpung Building annex in Gangnam-gu, Seoul. The Korea Zinc board of directors proposed an agenda to pay a cash dividend of 5,000 KRW per share and to delete the article in the bylaws limiting the issuance of new shares to foreign companies. In response, the largest shareholder, Yeongpung, proposed raising the cash dividend to 10,000 KRW per share and opposed the bylaw amendment, arguing that it could infringe on shareholders' preemptive rights to subscribe to new shares. Photo by Kang Jin-hyung aymsdream@

On the 3rd, Korea Zinc disclosed that it had signed a trust contract for the repurchase of treasury shares worth 150 billion KRW. This amounts to about 1% of the market capitalization.

Korea Zinc stated that most of the repurchased treasury shares will be canceled for shareholder returns, and a portion will be used for employee compensation.

Last year, Korea Zinc also announced a treasury share repurchase and cancellation worth 100 billion KRW as part of its shareholder return policy.

Park Ki-duk, CEO of Korea Zinc, said, "Even before the government announced its value-up policy, we voluntarily established a shareholder return policy and have steadily increased the shareholder return rate. This year as well, we will enhance shareholder value through treasury share repurchases and cancellations."

In this regard, Young Poong, the largest shareholder involved in a management rights dispute with Korea Zinc, issued a press release claiming, "There is a high risk that Korea Zinc's treasury share repurchase will be used as a means to increase the current management's shareholding and secure friendly shares."

Young Poong suspected, "Since the specific plans such as the cancellation ratio, the recipients and scale of employee payments, payment criteria, and timing will be arbitrarily decided by the board of directors or a subcommittee, it could be abused to strengthen the control of a particular shareholder."

Meanwhile, Korea Zinc announced that its consolidated operating profit for the first quarter was preliminarily estimated at 184.5 billion KRW, a 26.6% increase compared to the same period last year.

Sales were 2.3754 trillion KRW, down 6% from the same period last year. Net profit was 112.4 billion KRW, a decrease of 18.8%.