Homeplus Crisis... Could It Also Affect the Goryeo Zinc Management Dispute?

Could Bolster Chairman Choi Yoonbeom's Position
"Same Actions Could Be Taken at Korea Zinc"
MBK Shows Strong Displeasure at Such Views
Also Focusing on Injunction to Suspend Extraordinary Shareholders' Meeting

As the large-scale retailer Homeplus enters rehabilitation proceedings, there is speculation that repercussions are inevitable for the management rights dispute over Korea Zinc, in which MBK Partners, the company's major shareholder and private equity fund, is involved. This could serve as an opportunity to bolster the position of Korea Zinc Chairman Choi Yoon-beom, who has argued that MBK Partners is "not qualified to acquire Korea Zinc." However, Korea Zinc appears to be closely monitoring the situation rather than launching an immediate offensive, focusing instead on the injunction case that could be a turning point in the management rights dispute.

On the morning of the 5th, the second day of Homeplus's rehabilitation proceedings, Korea Zinc attended 'InterBattery 2025,' the largest domestic battery specialized exhibition held at COEX in Seoul. There, it introduced the value chain of its secondary battery materials business and focused on promoting the 'Troika Drive,' a future new growth engine. Korea Zinc did not issue any official statement regarding Homeplus, whose major shareholder MBK Partners is engaged in the management rights dispute and has entered rehabilitation proceedings. Korea Zinc stated, "We have no position to disclose at this time" concerning the Homeplus situation.

Choi Yoon-beom, Chairman of Korea Zinc. Photo by Kim Hyun-min

However, Korea Zinc seems to perceive that the Homeplus situation is not disadvantageous to them. A Korea Zinc official attending the exhibition told this publication, "When MBK Partners acquired Homeplus 10 years ago, they promised to 'closely cooperate with the company's management to maintain a productive relationship,' but ultimately, that promise was not kept." The official added, "The Homeplus case is a representative example that suggests if MBK Partners acquires Korea Zinc and does not achieve the desired profits and dividends, they might repeat the same actions."

MBK Partners expressed strong displeasure at this perspective. An MBK Partners representative said, "As an investment management firm, there can be successful investments and unsuccessful ones. It is already widely known that the offline large-scale retail market is challenging, and it is inappropriate to question management capabilities in this context." The representative continued, "What we considered most important in Homeplus entering rehabilitation proceedings was the normalization of company management and the interests of employees and business partners."

Currently, MBK Partners is engaged in legal battles with Chairman Choi Yoon-beom's faction, including criminal complaints and claims for damages, while appealing to the company's shareholders for support. Ahead of the extraordinary shareholders' meeting in January, MBK Partners filed an injunction request with the court to suspend the effectiveness of the shareholders' meeting resolution, arguing that the voting rights restriction imposed by Chairman Choi's side on Youngpoong was effectively illegal. This injunction case is regarded as a critical turning point in the Korea Zinc management rights dispute.

Kim Kwang-il, Vice Chairman of MBK. Photo by Yoon Dong-joo

The court hearing for the injunction case was held on the 21st of last month at the Seoul Central District Court Civil Division 50 (Chief Presiding Judge Kim Sang-hoon) and concluded on the same day. The court announced that it would decide whether to grant or dismiss the injunction by the 7th of this month, considering the upcoming Korea Zinc board meeting scheduled for next week. Both parties have continued to submit explanations and reference materials multiple times after the hearing, engaging in a "silent war" as the outcome of the management rights dispute hangs in the balance.

It has been confirmed that Korea Zinc submitted a total of three documents, including reference briefs and evidence, to the court by the morning of that day. Through these materials, Korea Zinc reiterated that the legal form of Sun Metal Corporation (SMC), which was used to exclude the voting rights on 25.4% of Korea Zinc shares held by Youngpoong?purchased from Chairman Choi's family and others?is a stock company under the Commercial Act, and that the mutual voting rights restriction for the purpose of defending management rights is lawful.

In response, MBK Partners reportedly emphasized again in a reference brief submitted on the 3rd that SMC is not a stock company. They also submitted explanations and evidence regarding the legal principle that the definition of a subsidiary under the Commercial Act presumes a domestic company, and thus, the mutual voting rights restriction using a foreign company like SMC is not permitted under the Commercial Act.