Court Approves Seorin Sangsa's General Meeting Call
Increases Possibility of Korea Zinc Securing Management Rights
The court's approval of the convening of the Seorin Sangsa shareholders' meeting is expected to accelerate Korea Zinc's acquisition of management control over Seorin Sangsa. If the management rights of Seorin Sangsa, a symbol of the joint venture between Korea Zinc and the Yeongpoong Group, are transferred to Korea Zinc, the two companies are likely to effectively part ways.
According to industry sources on the 20th, the Civil Division 50 of the Seoul Central District Court (Chief Judge Kim Sang-hoon) approved Korea Zinc's application to convene a shareholders' meeting on the same day.
Korea Zinc had planned to hold a Seorin Sangsa board meeting and shareholders' meeting in March, but these were postponed due to opposition from Yeongpoong. As a result, when the convening of Seorin Sangsa's board meeting was canceled, Korea Zinc submitted an application to the Seoul Central District Court for permission to convene an extraordinary shareholders' meeting. The court sided with Korea Zinc by approving the convening of Seorin Sangsa's extraordinary shareholders' meeting and all agenda items requested by Korea Zinc, including the additional appointment of inside directors.
Seorin Sangsa is an affiliate within the Yeongpoong Group responsible for exporting non-ferrous metal products and purchasing raw materials. Currently, Korea Zinc holds a 66.7% stake, and Yeongpoong holds 33.3%, but management has been led by CEO Jang Se-hwan, the second son of Jang Hyung-jin, an advisor to Yeongpoong, symbolizing the joint venture between the two families. However, since the Korea Zinc regular shareholders' meeting in March, the joint venture relationship between the two companies has effectively ended, leading to a conflict over management rights.
Korea Zinc plans to use the extraordinary shareholders' meeting to newly appoint three inside directors, including a successor to Honorary Chairman Choi, and to reappoint Honorary Chairman Choi Chang-geun.
Currently, the Seorin Sangsa board consists of four members from Korea Zinc (Honorary Chairmen Choi Chang-geol and Choi Chang-geun, Vice Chairman Noh Jin-soo, and Vice President Lee Seung-ho) and three members from Yeongpoong (Advisor Jang Hyung-jin of Yeongpoong Group, Seorin Sangsa CEO Jang Se-hwan, and CEO Ryu Hae-pyeong). If the four Korea Zinc members succeed in entering the board, Korea Zinc will secure a majority of the seats, thereby gaining definitive management control over Seorin Sangsa.
Last month, Korea Zinc decided to terminate the 'joint raw material purchasing and joint sales' conducted with Yeongpoong and also to end the contract for handling sulfuric acid at Yeongpoong's Seokpo Smelter in Bonghwa-gun, Gyeongbuk Province.
A Korea Zinc official stated, "We plan to hold the shareholders' meeting according to procedures," adding, "Through the additional appointment of board members, we aim to enhance synergy between Korea Zinc and Seorin Sangsa."
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