Korea Zinc and Yeong Poong·MBK Clash Over Cumulative Voting Standards

Yeong Poong·MBK: "Changing the Standard on the Day Shows Improper Intent"
Korea Zinc: "Aimed at Protecting Foreign Investors' Voting Rights"

Controversy has arisen over Korea Zinc’s application of different voting standards for cumulative voting at its regular shareholders’ meeting compared to the previous year.

At the regular shareholders’ meeting of Korea Zinc held at the Koreana Hotel in Jung-gu, Seoul on the 24th, there was a clash of opinions between Korea Zinc and the Yeong Poong·MBK Partners side over how to interpret the exercise of voting rights by foreign institutional investors under the cumulative voting system.

The cumulative voting system allocates voting rights in multiples depending on the number of directors to be elected. However, some foreign institutional investors choose to exercise their voting rights only for specific candidates, which leads to unexercised votes. The outcome can change depending on whether these unexercised votes are left as they are or proportionally redistributed.

The Yeong Poong·MBK side claims that Korea Zinc changed its self-determined standard on the day of the shareholders’ meeting. Their representative stated, “At last year’s shareholders’ meeting, Korea Zinc did not redistribute unexercised voting rights in such cases but calculated the results based only on the votes actually exercised. However, at this year’s meeting, the company overturned its previous standard by insisting that even under-voted rights should be proportionally redistributed by applying the ‘pro rata’ method.”

They argue that abruptly changing an already established standard at the shareholders’ meeting is not merely a matter of interpretation, but an attempt to directly influence the outcome.

In contrast, Korea Zinc’s legal counsel countered, “When foreigners exercise their voting rights, they often do not fully recognize the cumulative voting system and end up using only a portion of their available votes. If this is not by choice but due to structural or system issues, it is right to correct it.” The counsel added, “At this point, the board cannot discuss the voting standards. The vote should proceed according to company policy, and if there is a problem, it can only be resolved based on future court decisions.”

Park Ki-deok, President of Korea Zinc and chairman of the board, said, “Any judgment on illegality will be made separately,” adding, “There will be no change in the direction of the voting process.”

Park Giduk, President of Korea Zinc, is chairing the board of directors at the Korea Zinc Annual General Meeting held on the 24th. Korea Zinc

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