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Most Resolutions from Korea Zinc's Extraordinary Shareholders' Meeting Suspended… A Big Win for Young Poong and MBK Partners
A Green Light for Securing Control Over Korea Zinc
SEOUL, South Korea, March 8, 2025 /PRNewswire/ -- The court has ruled that restricting Young Poong's voting rights at Korea Zinc's extraordinary shareholders' meeting on January 23 was unlawful, suspending the effectiveness of most resolutions passed, including the resolution to impose a cap on the number of directors.
Furthermore, as Young Poong's voting rights restriction was deemed illegal, the duties of the seven Korea Zinc-nominated directors, who were appointed through a process marred by significant procedural defects, have also been suspended.
On March 7, the Seoul Central District Court's Civil Division 50 granted Young Poong and MBK Partners' injunction request to suspend the resolutions of Korea Zinc's extraordinary shareholders' meeting, ruling that "Under Article 369, Paragraph 3 of the Commercial Act, restricting Young Poong's voting rights in Korea Zinc is unlawful." The court consequently suspended the effectiveness of the resolutions on:
Article 1-2: Establishing a cap on the number of directors
Article 1-4: Stock split
Article 1-6: Appointment of the board chair from among outside directors
Article 1-7: Amendment of the dividend record date
Article 1-8: Introduction of quarterly dividends
Additionally, the seven directors nominated by Korea Zinc have been prohibited from exercising their duties as outside directors.
With this ruling, while the resolution to amend the articles of incorporation to introduce cumulative voting (Article 1-1) remains effective, the cap on the number of directors (set at 19) has been nullified, and the seven Korea Zinc-nominated directors can no longer perform their duties.
This decision paves the way for Young Poong and MBK Partners, the largest shareholders, to secure control over Korea Zinc.
Young Poong and MBK Partners welcomed the court's decision to grant the injunction.
At Korea Zinc's annual general meeting, expected in late March, a new board of directors will be elected through cumulative voting. Young Poong and MBK Partners have already submitted a shareholder proposal nominating 17 director candidates.
A representative from Young Poong and MBK Partners stated, "We will make every effort to restore corporate governance, shareholder value, and corporate value at Korea Zinc through a fair and transparent annual general meeting."
