Korea Zinc: "Yeongpung's CEO Arrested for Major Accident, Yet Major Decision Made"

"Questions Arise Over Who Actually Made the Decision"

Korea Zinc criticized Yeongpung for making a major decision to jointly conduct a public tender offer for its shares with the private equity fund MBK Partners under the special circumstance where both CEOs of Yeongpung were arrested due to a serious accident.

On the 22nd, Korea Zinc stated in a press release, "There are many questions about who and how the decision was made while both CEOs were recently arrested due to fatal accidents and serious disasters."

Due to a series of recent worker fatalities, both of Yeongpung's co-CEOs are currently under arrest. The board of directors now consists only of three non-standing outside directors, operating under an emergency management system excluding the arrested CEOs.

At Yeongpung Seokpo Smelter in Bonghwa-gun, Gyeongbuk Province, on December 6 last year, one worker died from arsenic poisoning during a tank motor replacement operation, and three workers were injured. In March, a subcontracted worker died while cleaning a cooling tower, and on August 2, another subcontracted worker died from heatstroke, marking a series of recent accidents.

The Yeongpung Group is a corporate group jointly founded by the late founders Jang Byeong-hee and Choi Gi-ho. Since then, the Jang and Choi families have continued their partnership, but recently the two families have shown a direct confrontation over the management rights of Korea Zinc.

Originally, the Choi family operated the core affiliate Korea Zinc, while the Jang family managed the entire Yeongpung Group and its electronics affiliates. However, conflicts escalated as Yeongpung opposed Korea Zinc's cash dividends and management and investment policies.

The Korea Zinc shares are similarly divided between Chairman Choi's side with 33.99% and Yeongpung's advisor Jang Hyeong-jin's side with 33.13%. Yeongpung plans to invest about 2 trillion won together with the private equity fund MBK to publicly tender for 7 to 14.6% of Korea Zinc shares and secure management rights of the company.