Injunction to Ban Treasury Stock Buyback Dismissed
Youngpoong Files Injunction Again to Halt Buyback Process
Koryo Ahn Declares "Further Dialogue Impossible"
The management control dispute between Youngpoong and Korea Zinc is escalating into a legal battle, intensifying the conflict. As Korea Zinc responded with a 3 trillion won tender offer for its own shares, Youngpoong filed another injunction to prohibit the purchase of treasury shares, further heightening the confrontation between the two sides.
According to industry sources on the 3rd, Youngpoong and Korea Zinc have been embroiled in numerous legal disputes following the tender offer. Starting with the injunction lawsuit filed by Youngpoong against Korea Zinc’s management to prohibit the acquisition of treasury shares, which was dismissed, Youngpoong has also filed ▲a breach of fiduciary duty complaint against outside directors ▲and a breach of fiduciary duty complaint related to Korea Zinc’s management involving Youngpoong-MBK.
Korea Zinc has taken legal actions including ▲a breach of fiduciary duty complaint filed by advisor Jang Hyung-jin and others against Youngpoong and MBK ▲a complaint to the Financial Supervisory Service regarding the dissemination of false information related to distributable profits ▲and a prosecution complaint concerning advisor Jang Hyung-jin’s violations of environmental laws and the Serious Accidents Punishment Act.
Choi Yoon-beom, Chairman of Korea Zinc, is attending the Korea Zinc press conference held at the Grand Hyatt Hotel in Yongsan-gu, Seoul, on the afternoon of the 2nd. [Photo by Yonhap News]
In particular, when Korea Zinc launched a tender offer for its own shares on the 2nd, Youngpoong immediately filed an injunction with the Seoul District Court to halt the treasury share purchase process. Although the court dismissed Youngpoong’s injunction request that day, Youngpoong did not accept the decision and proceeded with additional measures.
Choi Yoon-beom, chairman of Korea Zinc, said at a press conference that day, "It appears to be nothing more than reiterating much of the content of the dismissed injunction," adding, "It seems to be an attempt to increase uncertainty about the tender offer Korea Zinc is currently pursuing by exploiting the urgent situation with little time left for the tender offer."
Youngpoong and MBK reported the Korea Zinc board members who supported the tender offer to the prosecution, claiming that Korea Zinc’s treasury share purchase limit is only 58.6 billion won, not 6 trillion won. In response, Korea Zinc called it a "clear falsehood" and filed a complaint with the Financial Supervisory Service against them, initiating civil and criminal legal actions.
A Korea Zinc official stated, "MBK and Youngpoong have repeatedly engaged in acts that intentionally distort and spread false information and negative perceptions about Korea Zinc’s tender offer for treasury shares, causing market instability," adding, "Their series of actions and statements can only be seen as an admission that they are no longer parties with whom dialogue is possible."
An industry insider also assessed, "It seems that Korea Zinc and Youngpoong have completely crossed the point of no return," describing the situation as "like two trains running head-on with no intention of backing down."
Meanwhile, Korea Zinc will begin its tender offer for treasury shares at 830,000 won per share on the 4th. The tender offers conducted by Youngpoong and MBK will also close on that day. Youngpoong must decide by then whether to raise its tender offer price above 830,000 won.
Kang Sung-doo, president of Youngpoong, said, "The decision to raise the tender offer price is entirely MBK’s authority," but added, "I understand that additional funds have been deposited on MBK’s side, so there is sufficient financial capacity."
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