MBK Partners announced that Glass Lewis, a global proxy advisory firm, has shifted its support toward the MBK Partners and Youngpoong camp in the management dispute at Korea Zinc.
On the 20th, MBK and Youngpoong emphasized that Glass Lewis criticized Chairman Choi Yoon-beom and Korea Zinc's management in its agenda analysis report for the upcoming Korea Zinc annual general meeting scheduled for the 28th, specifically regarding the mutual shareholding structure established during the January extraordinary general meeting.
They further claimed that Glass Lewis viewed this measure as restricting Youngpoong's voting rights in Korea Zinc, infringing on shareholder rights, and representing a blatant entrenchment strategy prioritizing control over management rights.
According to MBK, Glass Lewis had only supported director candidates from Chairman Choi's side during the agenda analysis ahead of the January extraordinary general meeting, but its stance has significantly changed.
MBK also conveyed that Glass Lewis expressed support for appointing up to 11 directors from the MBK and Youngpoong side to the Korea Zinc board.
Specifically, Glass Lewis supported the appointment of 8 directors from the MBK and Youngpoong camp when appointing 12 directors without an upper limit on the number of directors and using cumulative voting, and expressed support for 11 directors from the MBK and Youngpoong camp when appointing 17 directors.
Like another well-known proxy advisory firm ISS, Glass Lewis opposed Chairman Choi's proposal of converting 1.6 trillion KRW of discretionary reserves into retained earnings, while supporting the MBK and Youngpoong camp's proposal of 2 trillion KRW.
MBK also reported that Glass Lewis, like ISS, opposed the appointment of Chairman Choi's three audit committee candidates.
Meanwhile, MBK claimed that the transfer of all 10.3% of Youngpoong shares held by the Australian subsidiary Sun Metal Corporation (SMC) to Sun Metal Holdings (SMH) as a stock dividend, intended to create a mutual shareholding structure by Chairman Choi's side, constitutes a violation of prior disclosure obligations and could result in a hefty fine.
MBK pointed out that "failure to disclose the stock transfer in advance violates the 'insider trading prior disclosure obligation' clause of the Capital Markets Act," and that SMC could face a fine of up to 2 billion KRW for this legal violation.
MBK is the largest private equity fund operator in Korea and Northeast Asia. Since September last year, citing serious governance issues with Chairman Choi of Korea Zinc, MBK has been working in alliance with Youngpoong, the major shareholder of Korea Zinc, to secure control over Korea Zinc.
A representative from Youngpoong and MBK Partners stated, "Although it was falsely claimed that the acquisition of Youngpoong shares was an independent decision by SMC, ultimately SMC is suffering huge financial losses due to Chairman Choi Yoon-beom's greed for control."
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