Korea Zinc: "Cost Increases Due to Hostile M&A... Focused Only on Defamation Battle"

MBK and Youngpoong Raise Allegations of Company Fund Misuse
Korea Zinc Responds: "The Responsible Party Is the One Pointing Fingers"

Chairman Choi Yoon-beom of Korea Zinc has pushed back against criticisms from MBK Partners and Youngpoong that he misappropriated company funds, stating that "the party responsible for causing the issue is the one pointing fingers."

On the 17th, Korea Zinc said, "MBK and Youngpoong are once again engaged in a smear campaign by spreading false claims that Chairman Choi is misusing company funds to defend his personal control."

Earlier, MBK and Youngpoong pointed out that Korea Zinc's commission payments in the third quarter of last year increased about threefold compared to the previous quarter, questioning, "Could personal expenses for Chairman Choi’s control defense have been paid with company funds?" MBK and Youngpoong submitted a formal request to Korea Zinc’s Audit Committee for a thorough audit of the company’s accounting figures.

On the 23rd of last month, when the temporary shareholders' meeting of Korea Zinc was held, Korea Zinc shareholders were lining up to enter the shareholders' meeting hall at the Grand Hyatt Seoul in Jung-gu, Seoul. Photo by Jo Yong-jun

In response, Korea Zinc argued that it is the MBK-Youngpoong alliance that unnecessarily triggered a hostile merger and acquisition (M&A) for private gain. Korea Zinc criticized, "In order to force through a hostile M&A of a key national industry, they have filed numerous lawsuits and are now using a 'displacement of blame' tactic by having the party responsible point fingers at the issue."

It added, "On the contrary, Youngpoong, which is struggling with losses, is wasting funds that should be used for business normalization and enhancing shareholder value, as if 'pouring water into a broken pot'."

Regarding criticism that Korea Zinc’s Australian subsidiary Sun Metal Corporation (SMC) exhausted 57.5 billion KRW to acquire Youngpoong shares despite operating at a loss, Korea Zinc explained, "In a situation where the success of MBK and Youngpoong’s hostile M&A raises concerns about energy supply disruptions due to downsizing of overseas and Australian affiliates’ businesses, we made an independent decision to purchase Youngpoong shares to prevent this."

It further stated, "By purchasing Youngpoong shares at about 30% below market price, we have brought benefits to the company and are being reasonably evaluated from both financial and investment perspectives."