Actively Publicizing the Homeplus Incident on the English Website
Aiming to Foster Negative Perceptions Among Overseas LPs Despite No Direct Connection
Korea Zinc is intensifying its public relations campaign against MBK Partners. It appears to be actively disseminating information by translating the Homeplus incident, which is not directly related to Korea Zinc, into English. This seems to be a strategic move to indirectly pressure MBK by informing overseas pension funds and other major limited partners (LPs) of MBK about negative news.
According to industry sources on the 4th, Korea Zinc posted 12 articles in the newsroom section of its English website over the past month. None of these articles were related to Korea Zinc itself. All were translations of articles criticizing MBK’s handling of the Homeplus incident by government authorities and the National Assembly. The posts included news of four securities firms, including Shin Young Securities, filing fraud lawsuits against Homeplus, as well as criticism of MBK Partners Chairman Kim Byung-joo by the National Assembly’s Political Affairs Committee. They also covered the National Tax Service’s tax investigation and the Financial Supervisory Service’s inspection. There was no content related to Korea Zinc’s own business or the management dispute involving Chairman Choi Yoon-beom, Youngpoong, and MBK.
The Korean-language website newsroom shows a similar pattern. Of the 60 posts published in the past month, only 10 were related to Korea Zinc. Aside from the management dispute, only three posts concerned Korea Zinc’s own business.
Since MBK Partners mainly receives investments from overseas pension funds and other foreign investors, this move is interpreted as an attempt to instill a negative perception among foreign limited partners. It exploits the fact that private equity funds (PEFs) are highly sensitive to the opinions of their LPs. An investment banking industry insider said, "The intention to post unrelated content translated into English is very obvious. It is a blatant attempt to pressure MBK through overseas LPs."
Meanwhile, on the 28th of last month, Korea Zinc once again defended its management rights at the regular shareholders’ meeting by using a method to restrict voting rights on cross-held shares. When Youngpoong and MBK dissolved their cross-shareholding relationship through a stock dividend the day before the shareholders’ meeting, Korea Zinc reestablished the cross-shareholding relationship by purchasing additional Youngpoong shares off-market on the morning of the meeting day.
As a result, the management dispute between the two sides has entered a prolonged phase. MBK, together with Youngpoong, has filed a criminal complaint regarding the restriction of voting rights on cross-held shares. The Fair Trade Commission is investigating Korea Zinc for allegedly creating an illegal circular shareholding structure through the cross-shareholding method.
Meanwhile, public opinion against MBK continues to worsen due to the Homeplus incident, in which MBK is suspected of deliberately selling promissory notes and filing a surprise corporate rehabilitation application. This is expected to act as an additional adverse factor in the Korea Zinc management dispute. A financial investment industry official said, "Although the Korea Zinc management dispute is unrelated to the Homeplus incident, if public opinion continues to deteriorate, it will inevitably have a negative impact. Korea Zinc seems to be aware of this and is deliberately continuing the public relations campaign."
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