Korea Zinc "Disqualification of Director Candidates" vs Youngpoong·MBK "Purpose of Delaying General Meeting"

"Concerns Over Violation of Commercial Act Prohibiting Concurrent Directorships at Three or More Companies"
Candidate Cheon Junbeom, DI Dongil Auditor Appointment Proposal Fails That Day
"Accuses Court of Delaying Decision Ahead of Hearing Date"

Korea Zinc reviewed the convening of an extraordinary general meeting of shareholders proposed by the Yeongpung·MBK Partners alliance. They decided to request a plan to resolve the legal disqualification issues concerning some of the director candidates proposed by Yeongpung·MBK.

Yeongpung·MBK criticized Korea Zinc for initiating a belated review of the disqualification issues raised about the candidates just before the court hearing date, accusing it of aiming to delay the extraordinary general meeting.

On the 25th, Korea Zinc held a board meeting and announced that it reviewed the request for convening an extraordinary general meeting of shareholders filed by the Yeongpung·MBK alliance last month.

Korea Zinc stated, "Among the 14 director candidates requested by Yeongpung·MBK, we reviewed some candidates with legal disqualification issues," adding, "We will conduct additional reviews for the remaining candidates and finalize the timing of the extraordinary general meeting."

Yeongpung·MBK proposed a total of 14 new director candidates, including two non-executive directors: Kang Sung-doo, Acting President of Yeongpung, and Kim Kwang-il, Vice Chairman of MBK Partners; and 12 outside director candidates: Kwon Kwang-seok, Kim Myung-jun, Kim Su-jin, Kim Yong-jin, Kim Jae-seop, Byun Hyun-chul, Son Ho-sang, Yoon Seok-heon, Lee Deuk-hong, Jung Chang-hwa, Cheon Jun-beom, and Hong Ik-tae.

During the board meeting, concerns were raised that Cheon Jun-beom, a lawyer and CEO of Wise Forest, might violate the Commercial Act's provision prohibiting holding director positions at three or more companies simultaneously.

Cheon was appointed as a non-standing auditor of Musinsa in March this year and was recommended as a candidate for a standing auditor at DI Dongil. However, the proposal to appoint Cheon Jun-beom as a new auditor was rejected at DI Dongil's extraordinary general meeting, naturally resolving the legal disqualification issue under the Commercial Act.

The Korea Zinc board also expressed negative opinions regarding the executive officer system proposed by the Yeongpung·MBK alliance. Previously, on the 28th of last month, Yeongpung·MBK had requested the convening of an extraordinary general meeting to appoint 14 new directors and introduce the executive officer system.

Korea Zinc stated, "As of June, only a very small number of companies listed on the KOSPI market have adopted the executive officer system," adding, "Applying the executive officer system may hinder management efficiency, create ambiguity regarding the responsibilities and roles of the executive officers, and potentially lead to avoidance of accountability."

The Korea Zinc board plans to request the Yeongpung·MBK alliance to provide a plan to resolve the disqualification issues related to the new director appointments. After receiving a response from Yeongpung·MBK, they will hold a follow-up board meeting to review the related matters and make a final decision on whether and when to hold the extraordinary general meeting.

In response, Yeongpung·MBK stated, "Despite having prior opportunities, the board delayed the review until the 29th after the request for convening, which itself aims to delay the extraordinary general meeting," adding, "At the court hearing scheduled two days later, Korea Zinc plans to reconvene the board and request the court to postpone the decision or dismiss the request to convene the extraordinary general meeting. This is merely a pretext to build a 'justification' for their claim."