MBK "Yesterday's General Meeting Was Illegal... Criminal Charges Against Choi Yunbeom Family"

Illegal Circular Shareholding Structure Formed
"Previous Day's Shareholders' Meeting Decision Is Invalid"

Yeongpung and MBK Partners announced that they will file a criminal complaint against Chairman Choi Yoon-beom and related parties. They argue that creating a circular shareholding structure through a grandchild company based in Australia, using the 'mutual share restriction' method, is illegal, and therefore, the previous day's Korea Zinc shareholders' meeting itself was unlawful.

On the 24th, Yeongpung and MBK held an online press conference to make this announcement. Kim Kwang-il, Vice Chairman of MBK Partners, stated, "Chairman Choi Yoon-beom's side used a circular shareholding method, which is problematic under the Fair Trade Act, to defend management rights. This was so desperate that they crossed a line that should not have been crossed and became lawbreakers," adding, "Because Korea Zinc committed an illegal act by using the grandchild company Sun Metal Corporation (SMC) for their own purposes, they are subject to criminal punishment, and we plan to report this to the Fair Trade Commission and investigative agencies."

Earlier, on the 22nd, Chairman Choi's side sold 10.33% of Yeongpung shares held by the Choi family to SMC, a Korea Zinc grandchild company based in Australia, in an off-market transaction worth 57.5 billion KRW. According to the 'mutual share restriction' system under the Commercial Act, if two companies hold more than 10% of each other's shares, they cannot exercise voting rights in the other company. This was used to restrict the voting rights of the 25% stake Korea Zinc held in Yeongpung. Although Yeongpung and MBK protested the illegality at the extraordinary shareholders' meeting that day, Korea Zinc proceeded with the board meeting while limiting Yeongpung's voting rights, passing the cumulative voting system and director appointments, thereby securing management rights. This marked a last-minute turnaround in a situation where Yeongpung and MBK were previously expected to win.

Vice Chairman Kim emphasized that all these actions were illegal. He said, "The fact that Park Ki-duk, CEO of Korea Zinc, and Chairman Choi Yoon-beom resigned from SMC's board earlier this month shows they recognized the problem," criticizing, "Chairman Choi committed an illegal act strictly prohibited by the Fair Trade Act by involving SMC and selling Yeongpung shares to it at a 30% discount to protect management rights."

Ultimately, since the management defense itself was conducted unlawfully, they claim that the extraordinary shareholders' meeting held the previous day is invalid. Vice Chairman Kim stated, "We plan to file an injunction with the court to challenge the validity of the shareholders' meeting decision yesterday," emphasizing, "We will file a criminal complaint and remove Chairman Choi from his position."