US Court Rejects Request to Halt Evidence Collection in Korea Zinc Ignio Investment Probe

US Court Sides with Young Poong Again, Allowing Evidence Collection to Proceed

On January 7, Young Poong announced that the legitimacy of the ongoing evidence collection process in the United States, related to suspicions about Korea Zinc’s investment in Ignio Holdings, has once again been recognized by a US court.

On January 6 (local time), the US Court of Appeals for the Second Circuit rejected Pedalpoint’s request to stay the evidence submission order from the Southern District Court of New York pending the outcome of the appeal. As a result, Young Poong explained that the evidence collection process it requested in the US will continue without interruption during the appellate proceedings.

Signboard in front of the headquarters of Korea Zinc in Jongno-gu, Seoul. Photo by Yonhap News

Previously, the district court determined that Young Poong’s request for evidence collection was closely related to ongoing shareholder derivative lawsuits and other legal proceedings in Korea, and found sufficient necessity and legitimacy for securing the materials, thus issuing the evidence submission order.

Young Poong stated that the appellate court, based on the lower court’s findings, also ruled that Pedalpoint’s arguments did not justify a stay of execution.

Young Poong considers the appellate court’s decision highly significant, as it effectively blocks Pedalpoint’s attempts to delay the proceedings. Pedalpoint had sought to postpone the submission of materials by filing for a stay and appealing the order, but with the appellate court’s clear rejection of the stay request, the legal grounds for further delaying evidence submission have been significantly weakened.

Ignio is a newly established electronic waste recycling company founded in 2021. Although it was in a state of capital impairment from the beginning, Korea Zinc acquired it by investing approximately 580 billion won, which sparked controversy over the high acquisition price. Young Poong has criticized the deal, noting that there have been ongoing questions from the market and shareholders about the rationale and decision-making process behind acquiring a company with annual sales of only several billion won at a price up to 100 times its initial capital.

Based on these concerns, Young Poong filed a shareholder derivative lawsuit, alleging a breach of the board’s duty of care and the potential for company losses. The company also expects that the appellate court’s decision will open the way to securing key materials regarding the decision-making process, capital flows, and valuation basis at the time of the Ignio investment.

A Young Poong representative stated, “The US appellate court’s rejection of the request to halt evidence submission, based on the lower court’s findings, reaffirms that Young Poong’s request for evidence collection is reasonable and legitimate. We will faithfully participate in all domestic and international legal proceedings to transparently clarify the facts related to suspicions about the Ignio investment, and do our utmost to protect Korea Zinc’s corporate value and the legitimate rights and interests of its shareholders.”