National Pension Service Supports Yoonbeom Choi of Korea Zinc... MBK Calls It a "Means to Extend Position Retention"

National Pension Service Holds First Committee Meeting on the 17th
Supports Amendment to Introduce Cumulative Voting System
Momentum Shifts in Favor of Chairman Choi Yoonbeom

The National Pension Service (NPS) decided to cast a favorable vote on the agenda to amend the articles of incorporation for the introduction of a cumulative voting system at the Korea Zinc extraordinary general meeting of shareholders scheduled for the 23rd, thereby supporting Chairman Choi Yoon-beom of Korea Zinc. MBK Partners immediately criticized the NPS's voting direction, stating, "The original purpose of protecting minority shareholders will be disregarded and exploited solely as a means to extend Chairman Choi Yoon-beom's tenure."

The NPS Fund Stewardship Committee held its first meeting on the 17th to deliberate on the NPS's voting direction regarding the Korea Zinc extraordinary shareholders' meeting agenda.

First, the committee decided to support the agenda item 1-1, which proposes deleting the clause excluding the cumulative voting system from the articles of incorporation. The cumulative voting system grants voting rights equivalent to the number of directors to be appointed and allows shareholders to concentrate their votes on one or several candidates, making it fundamentally minority shareholder-friendly. However, Yeongpung and MBK Partners oppose it, claiming it is a tool for Chairman Choi to secure his position. The committee also decided to support agenda item 1-2, which proposes limiting the number of directors to 19 or fewer.

For other agenda items related to director appointments, the voting direction was determined based on the outcomes of items 1-1 and 1-2. If both items 1-1 and 1-2 are approved, the committee will support agenda item 2, which involves appointing seven directors through cumulative voting. The votes will be split evenly with three votes each for Korea Zinc board-recommended candidates James Andrew Murphy, Jeong Dami, and Choi Jae-sik, and for Yeongpung and MBK candidates Kwon Kwang-seok, Kim Yong-jin, and Byun Hyun-chul.

If item 1-1 is approved but item 1-2 is rejected, the committee will support agenda item 3, which appoints seven directors through cumulative voting. If item 1-1 is rejected but item 1-2 is approved, the committee will support agenda item 4, which appoints seven directors by ordinary resolution. If both items 1-1 and 1-2 are rejected, the committee will support agenda item 5, which appoints directors without a limit on the number. In these cases, votes will be split evenly between three candidates from Korea Zinc and three from Yeongpung and MBK, with opposition to other candidates. The committee also decided to support all other agenda items, including the introduction of an executive officer system and formalizing minority shareholder protections.

With the NPS, the "casting voter" on the key issue of the cumulative voting system, deciding to vote in favor, the advantage has tilted toward Chairman Choi's side. Based on voting rights and the application of the "3% rule," it is known that one-third of the remaining shares, excluding those held by Yeongpung, MBK, Chairman Choi, and his allies, are held by the NPS, while two-thirds are held by foreign institutional investors.

However, Yeongpung and MBK have filed a provisional injunction to prohibit the submission of the new director appointment agenda based on the introduction of the cumulative voting system, leaving some variables. The court's decision is expected before the 21st.

After the announcement of the NPS's voting direction, MBK issued a statement saying, "If the cumulative voting system is introduced at this Korea Zinc extraordinary shareholders' meeting, the original purpose of protecting minority shareholders will be disregarded and exploited solely as a means to extend Chairman Choi Yoon-beom's tenure." They added, "The introduction of the cumulative voting system will prolong the control dispute between the largest and second-largest shareholders, which will negatively affect both the company and its shareholders. We will focus more on persuading domestic and foreign institutional investors and general shareholders to prevent the passage of the articles of incorporation amendment proposing the introduction of the cumulative voting system."