Korea Zinc Shareholders' Meeting, Bloody Battle Over 'Yeongpung Voting Rights'... Another Disruption

Situation Reversed Even on the Eve of the Shareholders' Meeting
Court Rules Restriction of Yeongpung's Voting Rights Is 'Valid'
Yeongpung Claims to Have 'Dissolved' Cross-Shareholding with Korea Zinc
Outcome of Management Rights Dispute Remains Uncertain

At the regular shareholders' meeting on the 28th, a battleground for the management rights dispute of Korea Zinc, a tense confrontation continued between Chairman Choi Yoon-beom of Korea Zinc and Yeongpung·MBK Partners over the restriction of Yeongpung's voting rights. The day before, the court ruled that the restriction of Yeongpung's voting rights on Korea Zinc shares was valid, but on the same day at Yeongpung's shareholders' meeting, they claimed that the shareholding ratio of Sun Metal Holdings (SMH), a subsidiary of Korea Zinc, fell below 10% due to a stock dividend, thereby dissolving the cross-shareholding relationship.

The court dismissed the provisional injunction filed by Youngpoong and MBK Partners against Korea Zinc, requesting permission to exercise voting rights at the shareholders' meeting. On the 28th, company officials are proposing access to the Korea Zinc shareholders' meeting scheduled to be held at the Mondrian Hotel in Yongsan-gu, Seoul. This shareholders' meeting is expected to have a high possibility of disruption. 2025.03.28 Photo by Dongju Yoon

The Korea Zinc shareholders' meeting, scheduled to be held at 9 a.m. at the Mondrian Hotel Itaewon in Yongsan-gu, Seoul, on that day, had not started even by 11 a.m. Shareholders were only able to enter the meeting hall around 9:50 a.m. due to system issues. A Korea Zinc official said, "The start is delayed due to the verification of the shareholder list and the confirmation process of duplicate proxy forms."

On that day, both sides were in conflict over whether Yeongpung could exercise voting rights on its 25.4% stake in Korea Zinc. Until the court's provisional injunction decision the day before, the MBK alliance's shareholding ratio had significantly dropped to the 10% range, making it highly likely that all major agenda items would be decided in favor of Chairman Choi's side, as in the extraordinary shareholders' meeting held on January 23. However, Yeongpung claimed that by issuing a stock dividend of 0.04 shares per share to shareholders on the same day, it severed the cross-shareholding relationship with SMH, enabling it to exercise voting rights on its 25.4% stake at the Korea Zinc shareholders' meeting, causing the situation to change rapidly.

Currently, the MBK alliance claims that Korea Zinc's shares represent over 47% based on voting rights and over 50% based on attendance at the shareholders' meeting. Chairman Choi's side holds the position that it is over 35%.

This regular shareholders' meeting is held following the court's partial injunction decision on the 7th, which suspended the effectiveness of all resolutions from the January 23 extraordinary shareholders' meeting of Korea Zinc this year, except for the cumulative voting system. Accordingly, the amendment to the articles of incorporation setting the upper limit of directors at 19 and the appointment of seven director candidates recommended by Korea Zinc, which were decided at the January extraordinary shareholders' meeting, are invalidated, and the agenda items will be presented and voted on anew from the starting point.

Meanwhile, tension was palpable at the Mondrian Hotel Itaewon, where the shareholders' meeting was held that day, even before it began. At the reception desk verifying identities, access by outsiders and the press was restricted. As shareholders began to enter, the Korea Zinc labor union, wearing headbands inscribed with "Solidarity Struggle," gathered holding pickets. They shouted slogans such as "MBK, step down." The pickets bore critical phrases against the MBK alliance, including "Speculative Capital MBK" and "Deficit Company Yeongpung."