Yeongpung, Korea Zinc File Injunction to Suspend Effect of Extraordinary General Meeting "Restriction of Voting Rights is Illegal"

Youngpoong Requests Suspension of Korea Zinc Extraordinary General Meeting Resolution in Court on the 31st

Youngpoong, the largest shareholder of Korea Zinc, has requested the court to suspend the effectiveness of the Korea Zinc extraordinary general meeting resolution, arguing that the restriction on voting rights is illegal.

On the 31st, Youngpoong filed an injunction with the Seoul Central District Court to suspend the effectiveness of the Korea Zinc extraordinary general meeting. Youngpoong claims that the provision in the Commercial Act restricting reciprocal voting rights applies only to domestic corporations, and since Sun Metal Corporation (SMC) is a foreign company with the characteristics of a limited company and does not fall under the category of a quasi-foreign company under the Commercial Act, Youngpoong’s voting rights were unfairly restricted.

The interim shareholders' meeting of Korea Zinc is being held on the afternoon of the 23rd at the Grand Hyatt Seoul in Yongsan-gu, Seoul. Photo by Jo Yong-jun

Earlier, on January 22, a day before the extraordinary general meeting, the Korea Zinc Chairman Choi Yun-beom’s side transferred 10.3% of Youngpoong’s shares, which were held by Youngpoong Precision and the Choi family, to SMC, creating a circular shareholding structure. SMC is a limited company established under Australian law by Korea Zinc. Accordingly, at the general meeting on the 23rd, the voting rights of the 25.42% stake in Korea Zinc held by Youngpoong (based on issued shares) were restricted.

Youngpoong criticized Korea Zinc for seriously undermining the essence of shareholder rights by restricting voting rights. In a press release, Youngpoong stated, "Considering the ripple effects of the concentrated voting system and the amendment to the articles of incorporation limiting the number of directors, which were resolved contrary to the original intent of the system, it is necessary to suspend the effectiveness of this extraordinary general meeting resolution as soon as possible. Even if we accept the situation where Chairman Choi’s side claims to have defended management rights at this extraordinary general meeting, there is no change whatsoever in the status of Youngpoong and MBK Partners as the largest shareholders holding 46.7% of the voting rights."

An MBK Partners representative said, "The resolution of the Korea Zinc extraordinary general meeting on the 23rd was made based on illegal and unfair logic and should rightfully be canceled or nullified. To urgently normalize Korea Zinc, a key national industry, the series of illegal acts recklessly committed by Chairman Choi must be corrected."