Yongpoong and MBK Oppose Appointment of Park Gideok as Korea Zinc CEO on Capital Markets Act Violation Allegations

Reappointing Individual Suspected of Fraudulent Capital Increase Is Unjust
"Board Responsible for Overseeing Management Must Also Clarify Its Position"

Yongpoong and MBK Partners, who are engaged in a management rights dispute with Choi Yoonbum, chairman of Korea Zinc, have opposed the appointment of Park Gideok as CEO of Korea Zinc. They argue that appointing someone who is under prosecution investigation for alleged violations of the Capital Markets Act as CEO constitutes a dereliction of the board's duties.

On May 9, YPC, an affiliate of Yongpoong, and Korea Corporate Investment Holdings, MBK's investment purpose company, announced this position. In their statement, they said, "Park Gideok, along with Choi Yoonbum and Lee Seungho, was named as a suspect in fraudulent transactions during the 2.5 trillion won paid-in capital increase announced on October 30 last year," adding, "He was also designated as a suspect for violating the Capital Markets Act during the search and seizure of Korea Zinc by the Seoul Southern District Prosecutors' Office on April 23."

They also raised strong criticism against the Korea Zinc board of directors. Yongpoong and MBK stated, "The Korea Zinc board has failed to fulfill its duty to protect the value of all shareholders, including those who have suffered losses. By doing so, the board is undermining its fundamental responsibilities and functions, such as providing healthy criticism, oversight, and checks on management." They emphasized, "It is only appropriate to postpone the appointment of Park Gideok as CEO until the issue of Capital Markets Act violations is resolved."

Additionally, they urged the board to clarify its position to shareholders regarding the alleged Capital Markets Act violations that led to the prosecution's search and seizure. Yongpoong and MBK stated, "Under the Commercial Act, directors have the right to request reports from the CEO on company affairs and have the authority and duty to supervise the execution of directors' duties." They insisted, "The Korea Zinc board should receive a report from the company regarding the circumstances of the Capital Markets Act violations and, considering the seriousness of the matter, should communicate the board's position to shareholders."

Yonhap News