Management Dispute Remains Deadlocked After a Year... Korea Zinc and Young Poong Continue Sharp Exchanges

Young Poong: "Legitimate Exercise of Majority Shareholder's Rights"
Korea Zinc: "Solely Focused on Damaging Corporate Value"

Even after a year since the management dispute between Korea Zinc and Young Poong began, both sides continue to engage in sharp exchanges. Korea Zinc emphasized its achievements in improving corporate governance and criticized Young Poong, which immediately countered by stating that it was "the legitimate exercise of the majority shareholder's rights."

On September 16, Young Poong issued a rebuttal to Korea Zinc's statement from the previous day, saying, "The legitimate exercise of shareholder rights by the majority shareholder cannot be considered hostile," and added, "The normalization of management that Young Poong pursues is the right of the largest shareholder and the starting point for enhancing Korea Zinc's sustainability."

Young Poong particularly criticized, "While Korea Zinc claims that expanding the number of outside directors and introducing a cumulative voting system are achievements in improving governance, these measures have been exploited by Chairman Choi Yoonbum of Korea Zinc as tools to maintain his control," and added, "The current management is using company resources to defend its control with only a minority stake and is prioritizing personal interests." Young Poong continued, "We have led substantial improvements, such as introducing the world’s first zero-discharge system, and are diligently addressing any shortcomings. This issue should be approached from the perspective of corporate social responsibility, not as a tool for a power struggle."

Young Poong further claimed, "The management used company funds to purchase treasury shares worth 2 trillion won and mobilized overseas affiliates’ funds to illegally form cross-shareholdings the day before the shareholders' meeting, infringing on the voting rights of the largest shareholder," and asserted, "Responding to this is a legitimate exercise of the majority shareholder's rights." In addition, Young Poong stated, "If Korea Zinc wants to earn the trust of the international community and investors as a key player in the strategic minerals supply chain, it must move away from the closed and abnormal management system centered around Chairman Choi Yoonbum."

Previously, Korea Zinc had stated, "We have introduced the outside director chair system and cumulative voting system, and have formed all five board committees under the board of directors with only outside directors, thereby enhancing the independence and transparency of the board." Korea Zinc added, "We are faithfully carrying out the promised cancellation of treasury shares for shareholders and the market, and we are growing as a shareholder-friendly model company that enhances corporate value."

Korea Zinc continued, "Since Young Poong joined forces with the predatory private equity fund MBK Partners a year ago to launch a surprise hostile merger and acquisition (M&A) attempt, it has focused solely on irrational attacks that undermine Korea Zinc's competitiveness and corporate value." Korea Zinc added, "Young Poong, which has been suffering from large-scale losses for three consecutive years and is embroiled in various environmental pollution controversies, lawsuits, and trials, should be focusing all its efforts on normalizing the Seokpo Smelter. We deeply regret that it is instead fixated solely on damaging Korea Zinc's corporate value."

Korea Zinc also stated, "To protect our competitiveness and value as the world's number one non-ferrous metal smelting company, we have had to incur unnecessary costs." The company added, "There have been as many as 24 lawsuits between both sides over the past year, and excessive legal disputes inevitably hinder normal business operations and discourage management decision-making."