Yongpoong: "Choi Yoonbum's Hostile Takeover Claims Are Fabricated... Proven by Court Precedent"

Daejeon District Court:
"Exercise of Largest Shareholder's Rights Is Not a Hostile Takeover"

Yongpoong and MBK Partners, who are in a management rights dispute with Choi Yoonbum, Chairman of Korea Zinc, argued that this case cannot be considered a "hostile takeover" as claimed by Chairman Choi. They cited the fact that the court has already ruled that the exercise of shareholder rights by the largest shareholder does not constitute a hostile takeover.

On September 29, Yongpoong based its argument on the ruling delivered by the Daejeon District Court on September 19. At that time, the Daejeon District Court, in a case related to a management rights dispute within Group A, dismissed the injunction request filed by the second-largest shareholder, stating, "The exercise of shareholder rights by the largest shareholder cannot be regarded as a hostile takeover." Yongpoong asserted that this demonstrates Chairman Choi's "hostile takeover" narrative is a fabrication and merely a political slogan. Yongpoong is the largest shareholder of Korea Zinc.

Yongpoong emphasized, "Chairman Choi Yoonbum's side has consistently framed the legitimate exercise of the largest shareholder's rights as a 'hostile takeover,' applying a political narrative," and added, "This court decision clearly shows that such claims are nothing more than groundless political slogans."

The company further criticized Chairman Choi for engaging in various illegal activities and using company funds not to secure new growth engines, but to defend his personal control. According to Yongpoong, Korea Zinc's net cash decreased by 4.1 trillion won over the past year, while borrowings increased by 3.7 trillion won. Net borrowings reached 3.3 trillion won.

During this period, interest expenses surged more than fourfold from 25 billion won to 110 billion won. Over the past year, fees paid for legal and consulting services amounted to 324.4 billion won. Yongpoong estimated that at least 100 billion won of this was misappropriated for Chairman Choi's personal defense of his control.

Yongpoong stated, "The essence of the control dispute at Korea Zinc is a conflict between the largest shareholder's efforts to establish sound corporate governance and Chairman Choi, the second-largest shareholder, seeking to maintain his private position," and criticized, "The normalization of corporate governance should remain a matter of shareholder rights, and Chairman Choi Yoonbum's side must not shift this burden onto Korea Zinc and its employees."

Yonhap News Agency