Gang Seong-du (left), President of Young Poong, and Lee Sung-hoon, Lawyer from Baker McKenzie & KL Partners, are greeting each other at a press conference held at the Press Club within the Press Center in Jung-gu, Seoul, on the morning of September 27 last year, regarding the public tender of Korea Zinc shares, reports Lim Se-jun.
[Herald Economy = Kim Kwang-woo] The conflict continues between Korea Zinc and the MBK Partners & Young Poong alliance over the introduction of the ‘cumulative voting system’.
On the 12th, the MBK Partners & Young Poong alliance issued a press release, claiming that Choi Yun-beom, who is advocating for the introduction of the cumulative voting system at Korea Zinc, had changed Sarin Corporation’s (now KZ Trading) articles of association to exclude cumulative voting, calling it a ‘height of hypocrisy’.
In response, Korea Zinc immediately issued a counterstatement criticizing the continuation of “unreasonable claims by bringing up inappropriate cases.”
According to MBK & Young Poong, at Sarin Corporation’s extraordinary shareholders’ meeting held on August 9 last year, Chairman Choi’s side put forth the proposal to change the company name to KZ Trading and to amend part of the articles of association to exclude cumulative voting as the first agenda item and passed it.
The Choi family and Korea Zinc hold a 66.7% stake in Sarin Corporation, so the agenda item was approved despite opposition from Young Poong.
As Sarin Corporation is an unlisted company, the ‘3% rule’, which limits shareholders’ voting rights to 3% in the amendment of articles concerning cumulative voting, was not applicable.
MBK & Young Poong stated, “Excluding the cumulative voting system at Sarin Corporation was Chairman Choi’s oppressive move to prevent even one director from Young Poong, a minority shareholder, from entering the board,” and “ISS has already identified such contradictory behavior and hidden intentions of Chairman Choi, and has recommended against the introduction of the cumulative voting system at the upcoming Korea Zinc extraordinary general meeting.”
In response, Korea Zinc commented, “The cumulative voting system currently being discussed in the political sphere pertains to the mandatory introduction for the appointment of directors at listed companies with total assets exceeding 2 trillion won,” and criticized the situation, stating, “KZ Trading is an unlisted company with no other minor shareholders or institutional investors, yet it is being mentioned in the same context as Korea Zinc, interpreting the situation in a self-serving manner.”
Korea Zinc continued, “It seems to be an attempt by the MBK & Young Poong side to prevent the adoption of the cumulative voting system, which they may perceive as an obstacle to their control over the Korea Zinc board of directors,” and retaliated by urging, “The Young Poong & MBK side should join efforts not only to protect the rights of minority shareholders at Korea Zinc but also introduce the cumulative voting system at the listed company Young Poong.”
Korea Zinc also addressed the MBK & Young Poong alliance’s mention of ISS’s recommendations, stating, “ISS recognized Korea Zinc as a technology-leading company playing a key role in the global zinc smelting sector and positively evaluated our existing performance, noting higher operating margins compared to other companies in the industry,” emphasizing the favorable assessment ISS made of the current management.