MBK Partners "We Will Enhance Shareholder Value of Korea Zinc Through a Professional Management System"

Claims of Sharp Decline in Shareholder Value After Chairman Choi Yunbeom's Inauguration
Enhancing Value Through Treasury Stock Cancellation and Strengthened Dividend Policy
Governance Reform of Korea Zinc Pursued Under Professional Management System

MBK Partners, the largest shareholder of Korea Zinc, announced that it will pursue a comprehensive reform of the corporate governance structure to restore shareholder value. They identified the cause of the decline in shareholder value under Chairman Choi Yoon-beom’s leadership as rooted in governance issues and judged that improving these is essential for the company’s future prospects.

Kim Kwang-il, Vice Chairman of MBK Partners, is answering questions at a press conference on the 10th. Photo by Oh Yugyo.

On the 10th, MBK Partners held a press conference at the Lotte Hotel in Seoul to announce the ‘Korea Zinc Governance Improvement and Shareholder Value Recovery Plan.’ Ahead of the extraordinary general meeting scheduled for January 23 next year, they stated that reforming the current governance structure centered on Chairman Choi Yoon-beom is essential to restore shareholder value.

According to MBK Partners, since Chairman Choi Yoon-beom took office in 2019 and took a leading role in management, Korea Zinc’s shareholder value and corporate value have sharply declined, worsening further after the transition to a sole management system under Chairman Choi in 2022. In particular, shareholder returns fell by -5% over the course of 2023, showing a significant gap compared to the KOSPI 200 and industry peer indices.

MBK Partners pointed out that Korea Zinc’s funds were used inefficiently, highlighting approximately 1.3 trillion KRW invested in private equity funds personally connected to Chairman Choi and in suspicious new business ventures. They argued that the company’s capital was not used efficiently and that unverified investments influenced by personal connections with the chairman adversely affected the company.

Furthermore, Chairman Choi was criticized for damaging shareholder value through open market repurchases of treasury shares and rights offerings. To prevent such shareholder value erosion, MBK Partners plans to introduce an executive officer system to separate ownership and management and to implement a professional management system for efficient operations and strategic decision-making.

MBK Partners also proposed measures for shareholder returns, including stock splits, treasury share cancellations, and regular disclosure of dividend policies. These measures aim to increase trading liquidity and enhance the market’s price discovery function. Additionally, they announced plans to reform Korea Zinc’s governance into an advanced system by introducing an outside director system to protect shareholder rights, establishing an ESG committee, and creating a gender equality committee.