Yeongpung, Korea Zinc File Injunction Request to Access Accounting Books..."Investigation of Breach of Trust and Other Acts"

One Asia Partners Investigated Over Allegations Related to SM Entertainment

Youngpoong Co., Ltd. announced on the 13th that it has filed a provisional injunction application with the Seoul Central District Court to inspect and copy the accounting books of Korea Zinc. Along with MBK Partners, it plans to launch a public tender offer for Korea Zinc shares and stated its intention to investigate the issues and suspicions raised against Chairman Choi Yoon-beom of Korea Zinc.

Youngpoong said, "Since Chairman Choi assumed the position of CEO of Korea Zinc, he has begun engaging in actions that violate the co-entrepreneurial spirit of the Youngpoong Group's co-founders," adding, "We judged that it is necessary to confirm the facts of illegal activities and take legal action to protect the interests of all shareholders."

Chairman Choi Yoon-beom of Korea Zinc and Advisor Jang Hyung-jin of Youngpoong Group.
[Photo provided by each company]

First, Youngpoong raised suspicions of breach of trust related to private equity fund investments managed by One Asia Partners. Major decisions requiring board resolutions, such as mergers, splits, sales, or significant investments, must go through the board of directors. However, Youngpoong claims that during the process of investing approximately KRW 604 billion of Korea Zinc funds into One Asia Partners, established in 2019, the investment was decided without board approval.

Youngpoong stated, "There are suspicions because Korea Zinc is almost the sole investor in most funds managed by One Asia Partners, and the head of the asset management company, who is unverified in the private equity industry, is a close middle school classmate of Chairman Choi. We will verify whether the directors fulfilled their fiduciary duties in this regard."

They also raised suspicions of involvement in stock price manipulation of SM Entertainment Co., Ltd. Youngpoong explained, "In the case of Habana No.1, a fund managed by One Asia Partners with about KRW 100 billion of Korea Zinc funds invested, it has been revealed that it was used for manipulating SM Entertainment's stock price. We suspect that Chairman Choi Yoon-beom and Korea Zinc's management were likely aware in advance of where the urgently raised funds were being utilized."

There were also allegations of breach of fiduciary duty related to the investment in Ignio Holdings. Youngpoong pointed out that Korea Zinc acquired the U.S. corporation Pedalpoint Holdings, LLC for KRW 580 billion but did not provide any specific valuation details at the time.

Additionally, Youngpoong mentioned allegations of violations of the Commercial Act related to guarantees provided without board resolutions. Korea Zinc reportedly decided on April 1 to provide a guarantee worth approximately KRW 269.4 billion to Kataman Metals, LLC, a subsidiary and related party, with only CEO approval and internal documentation completed, but without board resolution.

Youngpoong stated, "There have been multiple media reports raising suspicions that Korea Zinc is funneling work orders to C.S. Design Group Co., Ltd., which is suspected to be operated by relatives of Chairman Choi," adding, "Providing services or transactions to related parties or other companies under unfairly favorable conditions may constitute unfair trade practices by supporting related parties or other companies."

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