KCGI to Vote in Favor of Youngpoong at Korea Zinc's General Meeting of Shareholders

Establishment of Detailed Criteria for Exercising Voting Rights

KCGI Asset Management announced on the 27th that it has established detailed voting rights exercise criteria to actively oppose shareholder meeting agenda items for companies whose shareholder return rate, return on equity (ROE), price-to-book ratio (PBR), and other metrics fall below the set standards.

These criteria are scheduled to be applied starting from shareholder meetings held in March this year. According to the standards, KCGI Asset Management will also apply these criteria to the shareholder meeting agenda of its major investee company, Korea Zinc. Additionally, it will selectively express support for agenda items favorable to general shareholders.

The detailed voting rights exercise criteria of KCGI Asset Management primarily state that if the investee company's PBR, ROE, shareholder return rate, and other metrics fall below internal standards, it will, in principle, oppose three agenda items: the appointment of directors, approval of financial statements, and approval of directors' remuneration limits. However, if there is consideration of the business conditions and explanations from the company, approval may be given after internal discussions within the management division.

This measure is significant in that, in line with the recently announced government value-up program, asset management companies have prepared quantitative indicators and guidelines for concrete stewardship execution and decided to actively exercise voting rights.

KCGI Asset Management stated, "Until now, we have relied on external voting advisory institutions to exercise voting rights, but there were limitations in making proactive decisions from the perspective of shareholder interests. Establishing and implementing practical guidelines from the perspective of enhancing shareholder value is meaningful, and it is expected that applying the new criteria will lead to opposing voting rights on more than 50% of shareholder meeting agenda items among investee companies."

KCGI Asset Management established internal voting rights exercise guidelines by actively reflecting the 'Voting Rights Exercise Guidelines for Asset Management Companies' standardized by the Financial Supervisory Service and the Korea Financial Investment Association in 2023. Recently, it has concretized these internal guidelines using quantitative indicators and prepared 'detailed criteria' to practice more active voting rights exercise.

Meanwhile, KCGI Asset Management plans to apply the new criteria to the regular shareholder meeting of Korea Zinc, one of its major holdings. It intends to cast opposing votes on the company's proposed articles of incorporation amendments.

KCGI Asset Management plans to apply these criteria at Korea Zinc's upcoming regular shareholder meeting next month, where it holds shares, signaling support for the Yeongpung side. Korea Zinc has submitted agenda items to the regular shareholder meeting to delete the current articles of incorporation that limit the year-end dividend of 5,000 KRW per share and new share issuance exclusively to foreign joint ventures, and the Yeongpung side, a partner family, opposes this.

KCGI Asset Management explained, "We plan to exercise opposition on the grounds that the amendment of the articles of incorporation raises concerns about dilution of general shareholder value. Regarding the disagreement between the largest and second-largest shareholders on the per-share dividend, we will support the Yeongpung side's proposal of 10,000 KRW per share and exercise voting rights in a direction favorable to general shareholders from the perspective of shareholder returns."

This content was produced with the assistance of AI translation services.