Law, Goryeo Zinc's Cumulative Voting System Halted... Youngpoong and MBK Say "Expected Outcome"

by Kim Daehyun

Published 21 Jan.2025 16:05(KST)

Regarding the court's decision on the 21st not to allow the introduction of a cumulative voting system for the election of directors at the temporary shareholders' meeting of Korea Zinc, MBK Partners stated, "We respect the court's injunction ruling and believe it is a natural outcome."

On the same day, the Civil Division 50 of the Seoul Central District Court (Chief Presiding Judge Kim Sang-hoon) granted the injunction prohibiting the proposal of the temporary shareholders' meeting filed by the Yeongpung-MBK Partners alliance against Korea Zinc.

Law, Goryeo Zinc's Cumulative Voting System Halted... Youngpoong and MBK Say "Expected Outcome"

An MBK Partners official emphasized, "The cumulative voting method for director election requested by Yumi Development solely to preserve the position of Chairman Choi Yoon-beom of Korea Zinc does not meet the proper procedural requirements under Article 382-2 of the Commercial Act."

They further explained, "Although Yumi Development requested cumulative voting on the 10th of last month, at that time Korea Zinc's articles of incorporation explicitly stipulated that 'the cumulative voting system shall not apply,' so the court ruled that the cumulative voting request violated the Commercial Act and could not be considered a lawful claim."

An MBK Partners official said, "With this court decision, a signal flare has been fired for the reform of Korea Zinc's governance," adding, "We expect that through the temporary shareholders' meeting of Korea Zinc on the 23rd, substantial improvements in Korea Zinc's governance will begin, including the reorganization of the board of directors and the introduction of an executive officer system." "MBK Partners and Yeongpung will also make their best efforts to ensure that the temporary shareholders' meeting proceeds fairly and squarely with a simple voting method," they added.

Previously, Yumi Development proposed the introduction of a cumulative voting system at Korea Zinc as a shareholder proposal. Yumi Development is a company with a stake of over 88% held by the Choi family. However, with the court blocking the introduction of the cumulative voting system, the Yeongpung-MBK alliance is likely to gain an advantageous position in the vote battle at the Korea Zinc temporary shareholders' meeting. Currently, Yeongpung and MBK hold about 47% of the shares, which is estimated to be 6 to 7 percentage points more than Chairman Choi's side.