Yeongpung "The Biggest Beneficiary of Korea Zinc Dividends is the Choi Family"

On the 26th, Yeongpung strongly criticized, stating, "The biggest beneficiaries of shareholder returns from Korea Zinc are not 'Yeongpung' but the 'Choi family,' who have already pocketed hundreds of billions of won in dividends, yet are recklessly defending their management rights by incurring company debts worth trillions of won, which are not their own money."

Examining the dividend payout details of Korea Zinc over the past five years (2019?2023) for the co-founders' families, the Choi family received 215.9 billion won, while the Jang family received 96.7 billion won, indicating that the Choi family took significantly more dividends. This calculation only includes dividends received by individuals, excluding corporations.

Expanding the dividend history to the past 30 years (1994?2023), the Choi family has collected a staggering 364.9 billion won in dividends from Korea Zinc. Yeongpung claims that the biggest beneficiaries of Korea Zinc's 'shareholder returns' are none other than the 'Choi family.'

Yeongpung stated, "Although the Choi family has received dividends exceeding hundreds of billions of won while managing Korea Zinc, in the recent management rights dispute, they conducted a public tender offer for treasury shares mostly using company funds and borrowings, drawing criticism for 'defending management rights even by incurring company debt.'"

They also argued, "This was financed by depleting Korea Zinc's distributable profits, resulting in a reduction of distributable profits available for future dividends to Korea Zinc shareholders by the amount spent on treasury share repurchases."

At that time, Korea Zinc repurchased 2.04 million shares (9.85%) at 890,000 won per share, depleting a total of 1.8 trillion won in distributable profits, with most of the purchase funds reportedly covered by borrowings.

One week after the end of the public tender offer for treasury shares, on October 30, the Choi family announced plans for a general public paid-in capital increase of 3,732,650 common shares, nearly 20% of the total issued shares, at 670,000 won per share.

Korea Zinc faced allegations of 'simultaneous progress' for pushing a paid-in capital increase while conducting the prior treasury share repurchase. When the Financial Supervisory Service launched an investigation, Korea Zinc eventually withdrew the capital increase within a week.

Chairman Choi Yun-beom faced criticism for 'excessive salary increases,' having doubled his pay annually around the time of his appointment in 2022. His total compensation, including salary, bonuses, and welfare benefits, rose from 1 billion won in 2021 to 1.958 billion won in 2022, and reached a whopping 3 billion won in 2023 after his appointment. His pay tripled in two years.

In 2023, the company raised severance pay rates by executive rank and amended the 'Executive Severance Pay Regulations' to allow severance payments to 'Honorary Chairmen.'

Currently, Korea Zinc has three honorary chairmen: Choi Chang-geol, father of Chairman Choi Yun-beom, and his uncles Choi Chang-young and Choi Chang-geun. With the inclusion of 'Honorary Chairmen' in the severance pay regulations, it is expected that their severance payments upon retirement could reach hundreds of billions of won.

These three honorary chairmen have also been criticized for receiving excessive compensation. Despite not being on the board or directly involved in company management, they have received annual compensation ranging from 1 billion to 2 billion won. However, Honorary Chairman Choi Chang-geol has not received compensation since 2023.

In contrast, Yeongpung, the largest shareholder of Korea Zinc, receives 50 billion to 100 billion won annually in dividends from Korea Zinc and reinvests most of these dividend funds into environmental improvement projects at Yeongpung's Seokpo Smelter.

In 2021, Yeongpung became the world's first smelter to introduce a 'zero-discharge system' that does not discharge process water externally but fully reprocesses and reuses it in the process, and has been implementing an environmental improvement innovation plan worth about 100 billion won annually.

In addition to the costs set aside as provisions each year, Yeongpung invests approximately 100 billion won annually in environmental improvements through investments, expenses, and operating costs. These investments are reflected in the balance sheet, while expenses and operating costs are recorded in the comprehensive income statement.