Youngpoong and MBK Partners: "1 Billion Won of Korea Zinc Funds Injected After Choi Yoonbum's Personal Investment...Private Interest Appropriation"

Youngpoong and MBK Partners have criticized the injection of 100 billion won from Korea Zinc into Chairman Choi Yoonbum's personal investment company, calling it a structure for private interest appropriation.

Signboard in front of the headquarters of Korea Zinc in Jongno-gu, Seoul. Photo by Yonhap News

Youngpoong and MBK Partners stated on March 17, "According to recent media reports, Chairman Choi invested approximately 32 billion won in four entertainment companies through a personal investment association between 2019 and 2021. Subsequently, through One Asia Partners, a private equity fund (PEF) management company in which Korea Zinc participated as a major investor, around 80 billion won in company funds was additionally invested in the same companies."

They added, "Previously, Chairman Choi acquired shares of Chungho Comnet through his personal investment association, after which it was disclosed that 20 billion won of Korea Zinc funds flowed into Chungho Comnet during the process of selling off a Chungho Comnet subsidiary. As Chungho Comnet's stock price soared, Chairman Choi sold his stake and realized a profit close to 1 billion won."

According to Youngpoong and MBK Partners, this constitutes a classic conflict of interest structure. When company funds are injected after a personal investment, the value of the individual's investment can increase, significantly raising the risk of private interest appropriation.

The fact that the target companies are entertainment companies with no direct connection to Korea Zinc's core business has further fueled controversy. Moreover, it is known that many of these companies have consistently recorded losses.

Youngpoong and MBK Partners said, "This case involves a flow of funds that is difficult to explain as a conventional investment decision, and given that company funds were used to serve Chairman Choi's personal interests, it represents a serious corporate governance issue. The facts must be thoroughly clarified through the audit processes and related investigations by financial authorities."

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