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A South Korean court has halted key resolutions from Korea Zinc’s recent extraordinary general meeting(EGM), paving the way for MBK Partners and Young Poong to secure a majority on the company’s board.
The ruling, issued on March 7 by the Seoul Central District Court, effectively suspends most decisions made at Korea Zinc’s extraordinary general meeting (EGM) in January, significantly weakening Chairman Choi Yun-beom’s control.
As a result, MBK Partners and Young Poong, Korea Zinc’s largest shareholder, are now positioned to outnumber Chairman Choi’s camp on the board, thanks to the cumulative voting system. The system allows MBK Partners and Young Poong to elect more directors with each successive shareholder meeting, tilting the balance of power in their favor.
The court ruled that restricting the voting rights of Young Poong’s Korea Zinc shares was unlawful. This decision nullified key resolutions from the company’s January 23 EGM, including a proposed cap of 19 board seats. It also prevented seven Korea Zinc-nominated independent directors from performing their duties.
With the annual general meeting (AGM) scheduled for late March, the terms of five Choi-backed directors are set to expire, while seven others remain suspended. Excluding resignations, Chairman Choi’s faction will retain only five board members, alongside Senior Advisor Jang Hyung-jin from Young Poong’s side.
Given Korea Zinc’s dispersed shareholding, Chairman Choi is likely to secure an independent audit committee member under the 3% rule. However, in all other board elections, where cumulative voting applies, MBK Partners and Young Poong are expected to elect one to three more directors than Choi’s side. This would reduce Choi’s boardroom majority, which once stood at ten seats, to just two.
Even if MBK Partners and Young Poong do not secure an outright majority at the upcoming AGM, governance experts believe it is only a matter of time before they take full control. They have the ability to call additional EGMs, each time electing more directors than Choi’s camp. Analysts expect that within one or two more meetings, MBK Partners and Young Poong will achieve complete dominance over Korea Zinc’s board.
An MBK Partners and Young Poong spokesperson stated, “The days of a rubber-stamp board at Korea Zinc are over, and the governance battle is nearing its conclusion. We are committed to swiftly securing a board majority to restore strong corporate governance and enhance shareholder value.”
View source version on businesswire.com: https://www.businesswire.com/news/home/20250309285195/en/
