MBK Files Injunction to Prohibit 'Cumulative Voting Director Appointment' Proposal... Korea Zinc Calls It "Another Legal Abuse"

MBK·Youngpoong "Director Appointment Illegal Immediately After Bylaw Amendment"
Korea Zinc "No Legal Issues... Obsessed with Securing Management Rights"

Korea Zinc strongly criticized MBK Partners and Youngpoong for filing an injunction to block the proposal for the appointment of directors using the cumulative voting system, calling it "an act contrary to the rationale of improving corporate governance and enhancing shareholder value, obsessed with management rights."

On the 30th, Korea Zinc stated, "The MBK-Youngpoong alliance is exacerbating market confusion by abusing and misusing the law."

On the same day, MBK and Youngpoong submitted an injunction request to the Seoul Central District Court, asking to prohibit Korea Zinc from proposing a resolution to appoint directors using the cumulative voting system at the extraordinary general meeting scheduled for the 23rd of next month.

On March 19th, shareholders are entering the 'Korea Zinc Annual General Meeting' held at the annex of Yeongpung Building in Gangnam-gu, Seoul. Photo by Jinhyung Kang aymsdream@

The cumulative voting system grants voting rights equivalent to the number of directors to be appointed per share, allowing shareholders to concentrate their votes on specific director candidates. It is regarded as a mechanism to protect minority shareholders' rights.

However, the MBK-Youngpoong alliance argued that immediately using the cumulative voting system to appoint directors right after passing the agenda item No. 1-1, 'Amendment of the Articles of Incorporation for the Introduction of the Cumulative Voting System,' is legally problematic. They claimed that even if the amendment is approved at the extraordinary general meeting, appointing directors immediately based on it is unprecedented.

In response, Korea Zinc pointed out, "According to Supreme Court precedents, the resolution of a shareholders' meeting takes effect at the moment the resolution is made," and emphasized that "both the introduction of the cumulative voting system conditioned on the amendment of the Articles of Incorporation and the appointment of directors are lawful."

Regarding MBK and Youngpoong's claim that "requesting this without a provision allowing cumulative voting in the Articles of Incorporation violates the Commercial Act," Korea Zinc rebutted, stating, "Even if a listed company excludes the cumulative voting system in its Articles of Incorporation, proposing an amendment to introduce it is legal under the Commercial Act."

Korea Zinc also asserted that the MBK-Youngpoong alliance is aware of these legal interpretations but is repeatedly filing injunctions as a means to secure management rights.

Korea Zinc explained, "The judgment was made focusing not on the purpose, meaning, or effect of the cumulative voting system itself, but solely on whether it helps to seize control of the board at the extraordinary general meeting."

They added, "If the cumulative voting system is introduced, the diversity of the board will be further strengthened, which also implies that the current board and management will have to relinquish a significant portion of their vested interests."

A company official emphasized, "The entire nation is aware that the extraordinary general meeting was requested under the banner of improving corporate governance and enhancing shareholder value," and added, "It is time to make efforts to gain legitimate support through agendas that can receive shareholders' backing, rather than opposing for the sake of opposition."

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