‘Revival of Voting Rights Through Stock Lending Transactions…Korea Zinc Denies Consideration’, ‘MBK Partners and Young Poong have demanded Chairman Choi Yoon-beom and the board of directors of Korea Zinc to cancel all of their treasury stocks.’,
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, ‘On the 9th, MBK and Young Poong emphasized that Chairman Choi and the board should immediately cancel 12.3% of treasury stocks held, including 9.9% acquired through a public buyback.’,
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, ‘There is concern that Chairman Choi might use the treasury shares, over 12%, for defense against hostile takeovers instead of cancellation. They also suggested the possibility of voting rights being reinstated through stock lending transactions.’,
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(Source=News1),
, ‘A representative from MBK and Young Poong stated, “It has been over 50 days since the company conducted a tender offer for treasury stocks with the 2 trillion won borrowed under the promise of cancellation, yet cancellation has not been executed. There is ongoing speculation in the market that these treasury stocks could be improperly used for defending Chairman Choi’s management rights, possibly involving the employee stock ownership association or employee welfare fund. Predictions even suggest using stock lending transactions to revive voting rights for a showdown at an extraordinary shareholders meeting, hence Chairman Choi should fulfill his promise of treasury stock cancellation immediately.”,
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, ‘According to law, treasury stocks do not have voting rights, but these rights can be revived if transferred to a third party. However, disposition of treasury stocks is not allowed within six months of acquisition to prevent their misuse for defending management rights or benefiting specific shareholders.’,
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, ‘In a stock lending transaction, the owner lends the shares to a borrower for a specified period, and the borrower exercises the voting rights. If Korea Zinc lends treasury stocks to Chairman Choi’s allies in such a transaction and revives voting rights, it enables utilization at shareholder meetings.’,
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, ‘They warned that if Chairman Choi conducts a treasury stock lending transaction, he would face severe criticism from the market, shareholders, regulators, and courts, similar to the backlash during the public offering rights issue.’,
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, ‘The MBK and Young Poong side commented, “Since a treasury stock lending transaction counts as a disposal of treasury stock, it would face criticism for violating the statutory restriction on treasury stock disposals under the Capital Markets Act. Furthermore, responsibility may arise for the counterpart involved in such transactions and the securities firm facilitating this unlawful deal. As these are shares pledged to be canceled during board resolutions and court proceedings, failure to cancel them and using them for defending Chairman Choi’s management rights would attract further criticism from the market and shareholders.”’,
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, ‘A Korea Zinc representative countered, “We are not aware of any stock lending transactions and will take legal action as the opposing side spreads non-existent information as facts.”‘,
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, ‘Meanwhile, Korea Zinc is not the only company that has received requests for treasury stock cancellation. Last month, Must Asset Management asked Young Poong to cancel treasury stocks and reinforce shareholder returns.’,
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