MBK·Yeongpung Withdrawal of Injunction... Korea Zinc Criticizes "'If Not, So What' Style Injunction Abuse"

"Withdrawal for Face-Saving as Likelihood of Dismissal or Rejection Increases"

Regarding the withdrawal on the 26th of the provisional injunction application filed by MBK Partners and Youngpoong against Korea Zinc to prohibit the disposal of treasury shares, Korea Zinc criticized, "They are abusing provisional injunctions by filing and then withdrawing applications based on groundless speculation."

Korea Zinc issued a statement on the same day, saying, "From the beginning, they recklessly applied for a provisional injunction based on false facts, stirred public opinion, and then withdrew it as the likelihood of dismissal or rejection by the court increased, using it as a scapegoat."

Earlier, MBK and Youngpoong raised suspicions that Korea Zinc might be using the 2,040,300 treasury shares (9.85% stake) acquired through a recent tender offer not for cancellation but for securities lending transactions with third parties, and applied for a provisional injunction to completely prohibit the disposal of treasury shares. Securities lending is a transaction where the stock owner lends shares to a borrower for a certain period, during which the borrower gains voting rights.

Korea Zinc responded by stating that under the Capital Markets Act, treasury shares cannot be disposed of for six months from the acquisition date, and securities lending transactions are also subject to this regulation. They also declared their intention to strongly respond to the spread of false information.

However, when MBK and Youngpoong withdrew the provisional injunction on the same day, Korea Zinc claimed, "As the possibility of dismissal or rejection by the court increased, they withdrew the injunction and subsequently distributed press releases distorting the facts," adding, "We have already announced to shareholders and the market that the treasury shares acquired through the tender offer will be canceled through proper procedures."

They further criticized, "MBK and Youngpoong suddenly raised the legally impossible possibility of securities lending, spreading false information to the market and filing a provisional injunction, creating a misunderstanding that Korea Zinc intends to violate laws by disposing of treasury shares."

A Korea Zinc official emphasized, "MBK and Youngpoong are abusing the procedure because they bear no legal responsibility even if they lose or withdraw the provisional injunction application," adding, "This will ultimately backfire at the shareholders' meeting."