Chairman Choi Yun-beom Steps Down from Board, "Sincerely Apologize for Confusion Over Rights Offering" (Update)

Strengthening Board Independence and Governance Restructuring
Establishing Safeguards for Minority Shareholders

Choi Yoon-beom, chairman of Korea Zinc, apologized for pursuing a public offering rights issue. He pledged to step down as chairman of the board as soon as possible and to enhance the board's independence by having an outside director take over as chairman.

At a press conference held on the 13th at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, Chairman Choi stated, "I sincerely apologize with a humble heart for the market confusion and concerns of shareholders and investors caused during the process of pursuing the public offering rights issue."

Choi Yoon-beom, Chairman of Korea Zinc, is greeting at the Korea Zinc press conference held on the 13th at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. On that day, Chairman Choi stated, "I will step down from the position of chairman of the board as soon as possible, and an outside director will take over as chairman of the Korea Zinc board."

He added, "Although the intention was to strengthen a diverse and independent shareholder base centered on general investors, in the urgent and desperate situation, we failed to fully consider the feelings of existing shareholders in advance."

Chairman Choi provided a detailed explanation of the background behind the rights issue pursuit that day.

He said, "After the public tender offers by MBK and Youngpoong ended and the court dismissed the second injunction on October 21, the company's own share buyback also ended on October 23. Subsequently, the company and management faced an unexpected market situation," adding, "Contrary to the expectation that the stock price would fall, the price surged sharply on the 21st, and despite the fact that shares acquired on the 22nd could not participate in the tender offer, the stock price continued its upward trend, greatly deviating from predictions."

He continued, "On October 24, immediately after the end of the treasury stock buyback, the stock price hit the upper limit, soaring to an unpredictable level," and added, "The market instability intensified extremely due to the significantly reduced circulating shares after two tender offers."

He explained, "In this urgent situation, on the 30th of last month, the board resolved and announced a public offering rights issue," and stated, "The initial plan was to expand the shareholder base and disperse the concentrated ownership structure, which had been in conflict due to management disputes, by increasing the circulating shares in the market through a public offering targeting both existing shareholders and general investors."

However, after the rights issue announcement, "there were changes in circumstances such as concerns from institutional investors, minority shareholders, and the market, and requests for corrections to related filings," he lamented, "The market reaction and changes in circumstances were difficult for the company and the board to reasonably predict when pursuing the public offering rights issue."

Chairman Choi emphasized, "We will become a company that listens more attentively to the voices of shareholders and the market by promoting measures to strengthen the independence of the board and protect and encourage participation of minority shareholders."

He announced his intention to step down as chairman of the board, explaining, "Following the separation of the chairman and CEO roles, having an independent outside director serve as chairman will further strengthen the board's independence." Korea Zinc plans to amend its articles of incorporation at the upcoming shareholders' meeting.

Additionally, measures to enhance board diversity and shareholder communication will be pursued. Considering its status as the world's number one non-ferrous metals company and global standards, the company plans to appoint a foreign outside director to strengthen communication with foreign shareholders and overseas investors. The company is also actively considering appointing an IR-dedicated outside director to listen to market and shareholder opinions and convey them to the board and management.

Alongside this, Korea Zinc is also pushing for the introduction of quarterly dividends. Dividends will be decided before the record date to increase predictability.

To strengthen protection and participation of minority shareholders, the company plans to include provisions in the articles of incorporation to protect the rights of institutional investors and minority shareholders and enhance their management participation. Regarding issues where controlling shareholders' and minority shareholders' interests conflict, the company is considering measures such as MOM (Majority of Minority Voting) to actively reflect minority shareholders' opinions and public sentiment, including recommending directors based on their views.

Chairman Choi stated, "Korea Zinc must contribute to the national economy as a key industry, maintaining a long-term perspective, insight, and growth potential, and serve as a cornerstone of our country's economy," emphasizing, "Together with shareholders who have trusted and supported us, and those who have made rational choices for the company's long-term growth and shareholder value enhancement, we will win at the upcoming shareholders' meeting and protect the company."