Kang Sung-du, President: "Conflict Will Intensify at March Shareholders' Meeting"
"Refusal to Renew Hwangsan Handling Agency Contract Was Decisive"
"Now We Must Enter the Era of Professional Managers"
Youngpoong held its first solo press conference to officially state its position regarding the management rights dispute with Korea Zinc. Youngpoong President Kang Sung-doo pointed to Korea Zinc's takeover of Seorin Sangsa's board of directors and the termination of the sulfuric acid handling agency contract as major conflict factors, arguing that this public tender offer was an inevitable choice for the normalization of management between the two companies.
At the press conference on the 27th at the Korea Press Center in Jung-gu, Seoul, regarding Korea Zinc's public tender offer, President Kang appealed, "If I were to summarize in one word why Youngpoong launched the public tender offer even to the extent of yielding the position of the largest shareholder to MBK Partners, it would be 'out of desperation.' I ask, how desperate must we have been to go this far?"
On the 27th, Kang Sung-doo, CEO of Youngpoong, held a press briefing at the Seoul Press Center to explain Youngpoong's public tender offer for Korea Zinc shares and presented Youngpoong's position. Photo by Heo Young-han younghan@
He pointed out that after Korea Zinc's attempt to amend the articles of incorporation to allow a third-party allotment capital increase was blocked at the March shareholders' meeting due to Youngpoong's opposition, moves to exclude Youngpoong began in earnest.
One example he mentioned was the takeover of Seorin Sangsa's board of directors. Seorin Sangsa is a group affiliate responsible for exports, with Korea Zinc holding a 66.7% stake and Youngpoong 33.3%, but the Jang family has managed it for the past 10 years. Dissatisfied with relative disadvantages in exports, Korea Zinc secured management rights by appointing four additional inside directors in June.
President Kang explained that the decisive trigger for Youngpoong's decision to 'break up' was Korea Zinc's unilateral notice of refusal to renew the sulfuric acid handling agency contract. This contract involves the paid use of some sulfuric acid tanks and pipelines at Korea Zinc's Onsan smelter during the transportation of sulfuric acid produced at Youngpoong's Seokpo smelter to Onsan Port.
Kang stated, "Sulfuric acid is a byproduct necessarily produced during the zinc smelting process, and if it is not handled in time, zinc production cannot continue. The contract, which has been maintained without any incidents for over 20 years, being abruptly terminated means an intention to seize and shake the lifeline of the Seokpo smelter."
He expressed that Youngpoong's alliance with MBK Partners was to enable both Youngpoong and Korea Zinc to coexist. Kang said, "Since Chairman Choi Yoon-beom took office as CEO in 2019, he has privatized Korea Zinc for his own benefit, diluting the value of 16% of shares through third-party allotment capital increases or share swaps with domestic and foreign companies, infringing on the interests of existing shareholders."
President Kang emphasized, "For Korea Zinc to not be complacent with the current situation and to grow further, it is time to end the era of management by the two families and enter an era of professional management. Together with MBK Partners, we will strengthen control rights and normalize Korea Zinc's management."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
