Korea Zinc Invested 99.8 Billion Won in Havana No.1 Fund
Received Cash Reimbursement and SM Entertainment Shares
Youngpoong: "Key Issue Is Whether Chairman Yoonbeom Choi Approved"
Korea Zinc: "Distortion... Will Hold Them Accountable"
Youngpoong and Korea Zinc continued their dispute for a second consecutive day over the stock price manipulation case involving SM Entertainment. As Youngpoong repeatedly called for an investigation into Yoonbeom Choi, Chairman of Korea Zinc, Korea Zinc countered by calling the allegations "unreasonable."
On September 2, Youngpoong stated, "It is becoming increasingly clear that Korea Zinc was the source of the key funds used in the SM Entertainment stock price manipulation," adding, "The fact that Korea Zinc received back half of the funds it invested in the Havana No.1 Fund after just two months, liquidated the fund early after a year and a half, and directly received SM Entertainment shares as a physical distribution is definitive evidence."
According to Youngpoong, Korea Zinc invested 99.8 billion won in the Havana No.1 Fund, managed by One Asia Partners, in February 2023. This capital was used on February 16 and 17 of the same month to purchase SM Entertainment shares. Youngpoong claims that in April of the same year, Korea Zinc received a cash distribution of 52 billion won, and in December, it was allocated approximately 440,000 SM Entertainment shares (worth about 40 billion won) as a physical distribution. The fund was resolved for dissolution in January 2024 and liquidated in March.
Youngpoong argued, "The series of actions-amending the articles of incorporation, investing funds, accumulating shares, distributing cash, distributing shares in kind, and early liquidation-was not a simple investment activity but part of a price manipulation scheme," adding, "The core issue is whether Chairman Yoonbeom Choi was aware of and approved this." The company also emphasized, "The SM Entertainment shares currently held by Korea Zinc are themselves evidence of who provided the funds," and insisted, "An investigation into Chairman Choi can no longer be delayed."
On the same day, Korea Zinc issued another statement, rebutting, "All investments in financial products, including funds, were legitimate actions for financial purposes, and there was absolutely no violation of the law." The company continued, "Youngpoong is distorting facts and creating suspicions in pursuit of a hostile M&A," and reiterated, "We once again make it clear that there was no direct or indirect involvement in the SM Entertainment stock price manipulation."
Korea Zinc further stated, "At a time when we must play a pivotal role not only in national key industries but also in Korea-U.S. supply chain cooperation, Youngpoong is misleading public opinion with baseless suspicions," and added, "We will hold them appropriately accountable."
Previously, on the day before, Youngpoong had identified Korea Zinc as the "source of funds for price manipulation" and called for an investigation. Korea Zinc responded, "It was purely a financial investment and unrelated to any illegality," and added, "The specific execution was led by the fund manager (GP)."
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