The consortium of Korea Zinc, Youngpoong, and MBK Partners (hereinafter MBK) is engaged in a final showdown in the management rights dispute through a public tender offer.
On the 17th, Korea Zinc announced that it submitted a related petition to the Financial Supervisory Service (FSS) and requested an investigation regarding the sharp drop in stock price within a short period on the last day of Youngpoong and MBK's public tender offer. The suspicion is that the stock price was artificially lowered ahead of the tender offer to induce investors to participate in MBK's public tender offer.
Korea Zinc stated this in a press release on the same day, explaining, "The investigation request concerns suspicions that the stock price of Korea Zinc was artificially lowered to create a market environment that encouraged investors to participate in Youngpoong and MBK's public tender offer."
According to the Korea Exchange, on the last day of the Youngpoong and MBK consortium's public tender offer for Korea Zinc shares on the 14th, the stock price steadily rose from the morning and reached the day's highest price of 820,000 KRW at 1:12 PM.
This was interpreted as being influenced by Korea Zinc raising its counter public tender offer price to 890,000 KRW, higher than Youngpoong and MBK's 830,000 KRW, and increasing the maximum purchase volume from a total of 17.5% to 20% on the previous trading day, which attracted buying momentum.
At one point during the day, the intraday stock price approached 830,000 KRW, leading the market to speculate that Youngpoong and MBK's public tender offer might fail.
After reaching the peak price, Korea Zinc's stock price dropped to the day's lowest price of 779,000 KRW within about two hours and eventually closed at 793,000 KRW, down 0.1% (1,000 KRW) from the previous trading day's closing price.
Korea Zinc said, "Considering that the stock price surged to the highest point and then the volume of sales sharply increased several times during a specific time frame, there is a reasonable suspicion that a particular force intentionally tried to pull down the stock price," adding, "We judged that it cannot be ruled out that market manipulation prohibited under the Capital Markets Act may have occurred, so we submitted a petition to the authorities and requested an investigation."
A Korea Zinc official said, "We requested an investigation by the financial authorities because we cannot accurately grasp the situation with only the accessible data," and added, "Since the FSS has stated that it will take strict measures if unfair trading practices are confirmed during the public tender offer process, we will wait for the investigation results."
In response, MBK issued a statement strongly opposing, saying, "We strongly warn Korea Zinc and Chairman Choi Yoon-beom."
MBK pointed out, "The fact that more than 1.1 million shares, or an additional 5.34% voting rights, were subscribed in the public tender offer by MBK Partners and Youngpoong, the largest shareholders of Korea Zinc, shows that shareholders are disappointed with Chairman Choi Yoon-beom's self-stock public tender offer."
In particular, MBK argued, "MBK Partners and Youngpoong intend to purchase shares held by shareholders through the public tender offer, so the idea that they would manipulate the market by encouraging the sale of shares in the market contrary to that position is nonsensical."
They further countered, "It was Korea Zinc and Chairman Choi Yoon-beom who continuously spread rumors about participation by foreign capital or partner companies to induce stock price increases and prematurely disclosed the board meeting before the official announcement, excessively stimulating investors' expectations."
They added, "We hope that the baseless black propaganda, false claims, and unfounded suspicions that were rampant throughout the public tender offer process will stop now. And we hope they reflect on their actions."
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