Search and Seizure at Korea Zinc, Mirae Asset, and KB Securities Over Suspected Unfair Trading in Paid-in Capital Increase
by Choi Youngchan
Published 23 Apr.2025 10:17(KST)
Updated 23 Apr.2025 10:28(KST)
Suspected Paid-in Capital Increase Plan Before Tender Offer Ended
First Search and Seizure Since Management Rights Dispute Began
The prosecution has launched a compulsory investigation into Korea Zinc, which is under suspicion of unfair trading, as well as the lead underwriters for its paid-in capital increase, Mirae Asset Securities and KB Securities.
The court dismissed the provisional injunction filed by Youngpoong and MBK Partners against Korea Zinc, requesting permission to exercise voting rights at the shareholders' meeting. On the 28th, company officials are proposing to enter the Korea Zinc shareholders' meeting hall scheduled to be held at the Mondrian Hotel in Yongsan-gu, Seoul. This shareholders' meeting is expected to have a high possibility of disruption. 2025.03.28 Photo by Yoon Dongju
원본보기 아이콘On April 23, the Financial and Securities Crime Joint Investigation Unit of the Seoul Southern District Prosecutors' Office (headed by Chief Prosecutor Ahn Changju) announced that it was conducting searches and seizures at six offices and five residences of executives from Korea Zinc, Mirae Asset Securities, and KB Securities.
The prosecution is investigating whether Korea Zinc violated the Capital Markets Act in the process of announcing a 2.5 trillion won paid-in capital increase on October 30, 2024.
The suspicion is that Korea Zinc, which conducted a tender offer for its own shares from October 4 to October 23, 2024, failed to properly disclose its plan for a paid-in capital increase before the tender offer ended, even though such a plan existed. The Financial Supervisory Service referred the case to the prosecution in January 2025.
At the time, Korea Zinc publicly stated, "There are no plans being established that would change our financial structure after the tender offer." However, it was found that Mirae Asset Securities, the lead underwriter, began due diligence for the paid-in capital increase on October 14, 2024.
The prosecution plans to examine whether Korea Zinc's board of directors engaged in unfair trading by failing to state in the tender offer report their plan to buy back and cancel treasury shares and then cover the amount through a paid-in capital increase.
This is the first search and seizure conducted against Korea Zinc since the management rights dispute with MBK Partners and Youngpoong began.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.