Korea Zinc Audit Committee Member Secured by Choi Yun-beom's Side... Victory Over Youngpoong and MBK

In the proxy battle for the appointment of an audit committee member, which was the ultimate turning point of the extraordinary general meeting of shareholders of Korea Zinc, the side of Chairman Choi Yun-beom secured a victory.

With this, Korea Zinc has cleared a critical hurdle in its management control dispute with Youngpoong and MBK Partners, gaining a significantly advantageous foothold in defending its management control.

Korea Zinc held its 53rd extraordinary shareholders' meeting at the Mondrian Hotel in Yongsan, Seoul today, handling agenda items including the appointment of one separately elected audit committee member and four independent directors.

The ultimate battleground of the day was the agenda for the separate election of one audit committee member.

As a result of the vote, the appointment agenda for candidate Baek In-gyu, recommended by the Korea Zinc board of directors, received 5,092,815 votes in favor, recording approximately 81.8% of the exercised voting rights.

On the other hand, the appointment proposal for candidate Youkyung, recommended by Youngpoong and MBK, received 1,739,065 votes in favor, stopping at 27.93%.

It was rejected as it failed to meet the requirement of a majority consent of the exercised voting rights.

For this proxy battle, the 3% rule under the revised Commercial Act enforced in July of this year was applied for the first time to the election of audit committee members in large listed companies.

This method limits the voting rights of shares exceeding 3% of the total issued voting shares by aggregating the holdings of the largest shareholder and special related parties.

As the voting rights of the largest shareholder and special related parties were restricted, the sentiment of general shareholders and institutional investors such as Hanwha Group and LG Chem acted as critical variables.

Previously, the National Pension Service, a major shareholder, declared neutrality.

As the judgment of major institutional investors emerged as a core variable, both sides waged a fierce off-site public opinion war until just before the extraordinary shareholders' meeting.

The Youngpoong and MBK side intensively raised suspicions regarding private interests pursued by the family of Korea Zinc Chairman Choi Yun-beom.

Out of the One Asia Partners fund capital of approximately 560 billion won invested by Korea Zinc, 69 billion won was subsequently invested into an unlisted entertainment company in which Chairman Choi's family had previously invested.

They argued that the appointment of an independent audit committee member was necessary, as it was confirmed that company funds were utilized to increase the value of assets invested in by Chairman Choi's family.

In response, Korea Zinc countered that the investment in question was carried out in accordance with legitimate procedures as a fund investor, and individual investment decisions were made independently by the asset manager, One Asia Partners.

Previously, the decisions of major proxy advisory firms also influenced voting sentiment.

ISS, Sustinvest, and PIRC presented favorable opinions on the candidates recommended by the Korea Zinc side, influencing the judgment of institutional investors.

The Youngpoong and MBK side is placed in a situation where they must formulate future response strategies anew, as their strategy to strengthen internal monitoring through the appointment of an audit committee member has hit a brake.

The Youngpoong and MBK side stated, "Newly appointed Audit Committee Member Baek In-gyu must prove his self-emphasized expertise and independence in accounting, auditing, and internal control through actual actions," adding, "As the largest shareholder of Korea Zinc, Youngpoong and MBK Partners will fulfill necessary roles to ensure that the newly composed board of directors is operated transparently and responsibly based on the long-term interests of the company and all shareholders, rather than the interests of individual director Choi Yun-beom or specific shareholders."

Earlier, in the appointment of four independent directors conducted through cumulative voting, candidates from Chairman Choi's side and the Youngpoong and MBK side entered the board with two members each.

Consequently, Chairman Choi's side secured a total of 3 additional members (1 audit committee member and 2 independent directors) in this extraordinary shareholders' meeting, while the Youngpoong and MBK side added 2 members.

Accordingly, the Korea Zinc board of directors expanded from 14 to 19 members, and the composition between Chairman Choi's side and the Youngpoong and MBK side will continue to favor Chairman Choi's side at 12 to 7.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.