Youngpoong Calls for Investigation into Yoonbeom Choi
Korea Zinc Strongly Denies Involvement in "Stock Price Manipulation"
Fund Articles Amended in a Day... Allegations of Collusion Spread
Youngpoong, the largest shareholder of Korea Zinc, has called for a thorough investigation into Yoonbeom Choi, Chairman of Korea Zinc, in connection with the SM Entertainment stock manipulation case. Korea Zinc strongly refuted the allegations, stating that it has no involvement in price manipulation.
On September 1, Youngpoong stated in an official statement, "An immediate investigation must be conducted into Chairman Yoonbeom Choi and CEO Gideok Park, who played a key role in financing the SM Entertainment stock manipulation." Previously, prosecutors indicted Beomsoo Kim, founder and former chairman of Kakao, and Jae-Hyun Bae, former head of Kakao's investment division, on charges of violating the Capital Markets Act, seeking prison sentences of 15 years and 12 years, respectively. They are accused of maintaining SM Entertainment's stock price above the public tender offer price of 120,000 won to block HYBE's public acquisition bid.
Youngpoong pointed out that Korea Zinc independently invested 101.6 billion won in One Asia Partners' "Havana No. 1 Private Equity Fund." This capital was used for large-scale purchases of SM Entertainment shares in February 2023, which prosecutors classified as "on-market price manipulation to thwart the public tender offer." Youngpoong argued that since the fund was essentially operated by a single investor, Chairman Choi held the de facto decision-making authority over the use of funds.
Youngpoong further emphasized that Chairman Choi was a middle school classmate of Changbae Ji, CEO of One Asia Partners, and that testimony indicating Choi remarked in March 2023 to Chairman Beomsoo Kim of Kakao, "Jae-Hyun Bae did an excellent job," supports suspicions of collusion. Youngpoong stated, "It is difficult to believe that changes to the fund's articles and the execution of funds occurred without the approval of the CEO," adding, "There is a high likelihood that Chairman Choi was aware of and approved these actions in advance, which could constitute a violation of the Capital Markets Act or breach of trust."
Korea Zinc, on the same day, issued a separate statement, saying, "The company has invested surplus funds in financial products such as funds for financial investment purposes," and "all procedures were carried out transparently in accordance with relevant laws and internal regulations."
Korea Zinc explained, "We have never been directly or indirectly involved in any price manipulation activities related to SM Entertainment's stock, and the suspicions raised by some parties are completely unfounded." The company added, "Specific investments and executions were led by the fund manager (GP), and the company was merely a limited partner (LP)." Korea Zinc also stated, "We made investments through reasonable procedures and realized a certain profit. We strongly regret that Youngpoong continues to raise baseless suspicions and will consider legal action if necessary."
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