Goryeo Zinc Industry vs. Yongfeng·MBK: The intensifying power struggle before the shareholders' meeting

The ongoing legal battle between Korea Zinc, which is embroiled in a management rights dispute, and its largest shareholder, the MBK Partners consortium, is heating up ahead of the upcoming shareholders’ meeting. Both sides have put forward starkly contrasting claims, especially regarding past disputes and their positions at the upcoming meeting.

MBK and Yongfeng argue that Chairman Yoon Beom Choi of Korea Zinc illegally caused the failure of the temporary shareholders’ meeting, which led to their opposition to the split of share classes and the introduction of an executive management system. They believe that approving these proposals would mean accepting that their voting rights were effectively stripped.

MBK and Yongfeng emphasize that at the January last year shareholders’ meeting, the court invalidated the related resolutions on the grounds that Yongfeng’s voting rights were unlawfully deprived. They see this meeting as an opportunity to overhaul the company’s governance structure. Their stance aims to protect the company’s value by correcting the responsibilities of the board and management.

In contrast, Korea Zinc strongly refutes these claims. They state that the court ruling in January was based on the fact that some subsidiaries did not fully meet the requirements of a joint-stock company, and that the voting restrictions in March were lawful. They also point out that the shareholder proposals submitted by MBK and Yongfeng are reintroductions of proposals they previously opposed, causing confusion among shareholders.

The upcoming shareholders’ meeting could go beyond simple voting on proposals and may serve as a platform to reaffirm principles of management and board responsibilities. This dispute over management rights could impact the company’s future operations and market reputation, drawing close attention from industry stakeholders.