MBK: "Korea Zinc Tender Offer Aimed at Strengthening Management Control by 'Majority Shareholder'"

Hostile M&A Claims Deemed Groundless
For the Past 25 Years, Youngpoong and the Jang Family Have Been the Largest Shareholders of Korea Zinc with Over Twice the Stake Gap Compared to the Choi Family
Korea Zinc is an Affiliate of Youngpoong Group Led by Advisor Jang Hyeong-jin... No Possibility of Affiliate Separation

Since the 13th, Youngpoong and MBK Partners, who launched a public tender offer for Korea Zinc, stated on the 18th, "The public tender offer is clearly aimed at strengthening the management rights of the largest shareholder and the first major shareholder, and considering only the shareholding gap between the Jang and Choi families, the hostile M&A claimed by some is nothing but nonsense."

MBK explained that the basis for the purpose of strengthening the management rights of the largest shareholder lies primarily in the shareholding gap between the Jang and Choi families in Korea Zinc over the past 25 years.

In 2002, the shareholding gap between the Jang family (45.51%) and the Choi family (13.78%) was as large as 31.73%, marking the largest difference. Since 2022, the shareholding gap narrowed to 16.75% with the Jang family holding 32.09% and the Choi family 15.34%, but it widened again, and as of September 2024, the Jang family owns 33.1%, more than twice the Choi family's 15.6%, making them the largest shareholder of Korea Zinc.

Youngpoong stated, "It is questionable how the largest shareholder, who has such a gap with the second-largest shareholder group, the Choi family, acquiring additional shares in the market to strengthen management rights can be condemned as a hostile M&A," and added, "Proxy Chairman Choi Yoon-beom, who is suspected of attempting to privately control the company by neglecting his role to manage for the benefit of all shareholders, is opposing the legitimate exercise of rights by the largest shareholder."

The second basis presented is that Korea Zinc's independence from Youngpoong is significantly low. Youngpoong and the Jang family are the largest shareholders of Korea Zinc, and Youngpoong and Korea Zinc are affiliates of the large business group ‘Youngpoong’ led by Advisor Jang Hyung-jin under the Fair Trade Act. The group separation claimed by Chairman Choi’s side is practically impossible.

MBK also reiterated that companies such as Hyundai Motor, Hanwha, and LG are not friendly shareholders of Chairman Choi. If they were friendly shareholders, they should have disclosed joint actions with voting rights exercised jointly with Chairman Choi Yoon-beom as major shareholders of joint action, but these companies only disclosed business partnerships and never revealed themselves as joint actors, which is the basis for this claim.

Youngpoong further stated, "Korea Zinc is not the personal property of Chairman Choi Yoon-beom, and these companies are not a faction supporting Chairman Choi personally," and added, "Proxy Chairman Choi should first thoroughly disclose to shareholders the issues and suspicions raised against him."

The joint public tender offeror Youngpoong announced on the 13th that Chairman Choi Yoon-beom is suspected of breach of trust in the investment of One Asia Partners, involvement in SM price manipulation, high-price purchase suspicion of Ignio, and violation of the Commercial Act, and based on shareholder rights stipulated in Article 466 of the Commercial Act, they are proceeding with a provisional injunction application for inspection and copying of accounting books and records.