MBK's Eight Public Questions to Chairman Choi Yoon-beom... "Who Made the Payment?"

On the 24th, MBK Partners issued a press release titled "Questions Chairman Choi Yoon-beom Must Answer Now," publicly questioning Chairman Choi and Korea Zinc.

MBK first asked, "While other major overseas competitors in the same industry maintain a certain level of operating profit margin, why is Korea Zinc's margin declining, and what measures are being taken to address this?"

They continued, "You claim that the investment process in the One Asia Partners funds was lawful, but generally, private equity funds have an investment commitment period of 5 to 10 years. Why do you describe investing in such long-term private equity funds as 'short-term fund management'? Did the board of directors properly review and approve this fund investment? If there was no board approval process, is it true that Chairman Choi Yoon-beom, who was the CEO at the time, authorized it?"

They also pressed, "During the public tender offer period by HYBE, was the large acquisition of SM Entertainment shares made despite knowing there could be issues of market manipulation? Was the investment decision in the problematic One Asia Partners' Habana No. 1 fund approved by CEO Choi Yoon-beom?"

Furthermore, they questioned, "Ignio disclosed sales of 2.9 billion KRW in 2021. You claim that trading sales should have been included in the 2021 sales, stating the correct figure is 60 billion KRW, but neither the board materials nor disclosure documents at the time mentioned any trading portion. Isn't this false reporting and a violation of disclosure regulations?" They also raised doubts, saying, "Where was the approximately 200 billion KRW of new funds injected into Ignio for reasons such as new factory construction actually used? If we accept Korea Zinc's claim as is, it means they paid nine times the sales to acquire the trading division. Which company in the world buys a trading company at nine times its sales?"

They went on to ask, "Regarding the treasury shares acquired at a scale of 250 billion KRW and planned to be additionally acquired up to a maximum of 550 billion KRW, will these shares be canceled?" emphasizing, "If you truly value shareholder value, treasury shares should not be used as a means for Chairman Choi's personal defense of management rights as in the past."

MBK also questioned the relationship between Chairman Choi Yoon-beom and C.S. Design Group, which has virtually monopolized interior construction related to Korea Zinc.

They further asked, "If cooperative trading partners such as Trafigura, which already holds shares, or Sumitomo, which is currently reported in the media, acquire Korea Zinc's shares as white knights, wouldn't Korea Zinc's business inevitably become subordinate to them?" and pointed out again, "Wouldn't making such a decision constitute breach of fiduciary duty, given that trading conditions with them would inevitably worsen?"

Additionally, they noted, "Korea Investment & Securities is mentioned as a white knight and actually held a 0.8% stake for a long time after trading at a high price (658,000 KRW per share) during the 2022 treasury stock exchange. If Korea Investment & Securities is a white knight, shouldn't they have reported a 5% stake as a joint actor?"