MBK Partners Refute Claims of Shareholder Value Damage at Korea Zinc

MBK Partners rebutted the claim by Chairman Choi Yoon-beom of Korea Zinc that the 'shareholder value of Korea Zinc has been damaged,' calling it a distortion, and pointed to backward corporate governance as the fundamental cause of the shareholder value deterioration. At a press briefing on the 10th, MBK Partners stated that shareholder value of Korea Zinc sharply declined after Chairman Choi Yoon-beom took office, and the core issue lies in flawed corporate governance.

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Earlier, Chairman Choi Yoon-beom's side of Korea Zinc countered that MBK Partners distorted the shareholder value indicators. In particular, regarding the Total Shareholder Return (TSR), they argued that the temporary negative TSR in 2023 was due to a stock price decline, and pointed out that the TSR turned positive in August 2024, which they claimed was a positive sign. However, MBK Partners evaluated TSR based on the first 'one year' period after Chairman Choi's inauguration in December 2022, emphasizing that Korea Zinc's TSR remains low compared to peers in the same industry.

MBK Partners criticized Chairman Choi's side for arbitrarily setting the evaluation period and making errors in comparing with similar companies in the same industry. Korea Zinc is a non-ferrous metal smelting company, and comparisons with steel and iron companies are inappropriate, they argued. Instead, MBK Partners compared Korea Zinc with peer groups based on business similarity, utilizing industry indicators used in ISS's 2023 report.

Furthermore, regarding Chairman Choi's side classifying investment items totaling 113 billion KRW as unrelated to business operations, MBK Partners distinguished between sector venture blind fund investments and investments in distressed companies, explaining that investments in distressed companies such as Hyzon Motors were made without thorough due diligence.

MBK Partners called Chairman Choi Yoon-beom's claims 'distortions' and continued to emphasize that the cause of shareholder value deterioration is the management rights dispute.

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