Complaint Filed Against Advisor Jang Hyeongjin and Vice Chairman Kim Gwangil, etc.
Yeongpung Precision, which became the target of a public tender offer by Yeongpung and MBK Partners, has filed a lawsuit against the management of the two companies on charges including breach of fiduciary duty.
On the 20th, Yeongpung Precision announced that it had submitted a complaint to the Seoul Central District Prosecutors' Office against Jang Hyung-jin, an advisor of Yeongpung, three outside directors, and Kim Kwang-il, vice chairman of MBK Partners, on charges including breach of fiduciary duty.
Yeongpung Precision publicly opposed the hostile merger and acquisition (M&A) after MBK Partners and Yeongpung, along with Korea Zinc, launched a public tender offer for the company.
Chairman Kim Byung-joo of MBK Partners and Chairman Choi Yoon-beom of Korea Zinc. [Photo provided by each company]
Yeongpung Precision claims that under the contract between MBK Partners and Yeongpung, Yeongpung Co., Ltd. suffers losses while MBK Partners and Vice Chairman Kim gain benefits, indicating serious issues. The company also reports that Advisor Jang gave instructions during this decision-making process.
Additionally, Yeongpung disposed of more than half of its shares in Korea Zinc, which accounts for a significant portion of its assets, without following proper procedures such as a special resolution at the shareholders' meeting. It also raised concerns about ignoring various legal regulations, as major decisions were made solely by three outside directors while two CEOs were detained.
In particular, Yeongpung Precision argues that the recent contract between the two companies prohibits Yeongpung from disposing of Korea Zinc shares to third parties for 10 years and grants MBK Partners a right of first refusal after 10 years, which seriously infringes on Yeongpung’s property rights.
Yeongpung Precision, Korea Zinc, and other shareholders stated that they will hold Yeongpung’s directors and management, as well as the conspirator MBK Partners, civilly and criminally liable. They plan to promptly proceed with various legal actions, including injunction applications and civil and criminal lawsuits.
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