Korea Zinc, One Day Before Extraordinary General Meeting, Neutralizes Yeongpung Voting Rights

Acquisition of 10.3% of Youngpoong Shares through Sun Metal
Korea Zinc: "New Voting Rights Regulations under the Commercial Act to Be Applied"

Choi Yoon-beom, chairman of Korea Zinc, who is engaged in a management rights dispute, took defensive measures to block Youngpoong's exercise of voting rights on Korea Zinc shares a day before the extraordinary general meeting of shareholders.

Choi Yoon-beom, Chairman of Korea Zinc, is speaking at the Korea Zinc press conference held on the 13th at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. On the right is CEO Park Ki-deok. On this day, Chairman Choi stated, "I will step down from the position of chairman of the board as soon as possible and have an outside director take over as chairman of the Korea Zinc board." Photo by Kim Hyun-min

On the 22nd, Korea Zinc announced that its grandchild company, Sun Metal Corporation (SMC), acquired some of the Youngpoong shares held by Chairman Choi Yoon-beom and his family, as well as Youngpoong Precision, an affiliate of Korea Zinc.

The Youngpoong shares acquired by SMC amounted to 190,226 shares, which corresponds to 10.3% of Youngpoong's total issued shares (1,842,040 shares). The amount was 57.5 billion KRW.

SMC acquired the shares from Youngpoong Precision based on the previous day's closing price. It was also disclosed that SMC purchased Youngpoong shares from the Choi family at a 30% discount from the previous day's closing price.

Korea Zinc explained that with SMC's acquisition of Youngpoong shares, new voting rights regulations under the Commercial Act will apply. Due to the "mutual shareholding restriction" rule, the exercise of voting rights on Korea Zinc shares held by Youngpoong will be restricted at the extraordinary general meeting.

Article 369, Paragraph 3 of the Commercial Act stipulates that if Company A or its parent or subsidiary holds more than one-tenth of the total issued shares of Company B, the shares of Company A held by Company B have no voting rights. Although SMC is a grandchild company, Korea Zinc holds 100% of its shares, so it is recognized as a subsidiary under the Commercial Act.

Korea Zinc stated, "The extraordinary general meeting of Korea Zinc scheduled for the 23rd will proceed in accordance with the new regulations."

The shareholding structure of Korea Zinc is known to be 40.97% by the Youngpoong-MBK Partners alliance and about 34.35% by Chairman Choi Yoon-beom’s side including friendly shares. Among these, Youngpoong is reported to hold about 25% of the shares.

Korea Zinc will address the agenda of appointing 21 directors at this extraordinary general meeting. Seven directors are recommended by Chairman Choi’s side, and 14 directors are recommended by the Youngpoong-MBK Partners side. Although the application of cumulative voting was canceled, making the entry of 14 directors from the Youngpoong-MBK side into the board likely, if the voting rights of about 25% of Youngpoong’s shares are nullified, a favorable situation for Chairman Choi’s side will be created.

Korea Zinc expressed hope that "through the successful progress of the extraordinary general meeting, Korea Zinc, a national key industry, can be protected and the overseas leakage of national core technologies can be prevented."

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