Korea Zinc loses court battle over curbs on Young Poong's voting rights

SEOUL, Nov. 12 (Yonhap) -- A court ruled Thursday that a resolution passed at Korea Zinc Co.'s annual shareholder meeting last year that restricted the voting rights of Young Poong Corp. and private equity firm MBK Partners Ltd. must be nullified.

Young Poong and MBK formed an alliance under an agreement signed in September 2024 to secure management control of Korea Zinc, the world's largest refined zinc smelter. Since then, the two parties have jointly exercised their voting rights, prompting Korea Zinc Chairman Choi Yun-beom to wage a protracted battle to fend off their takeover bid.

The Seoul Central District Court ordered Korea Zinc to revoke the resolution adopted at its March 2025 shareholder meeting in a lawsuit filed by the Young Poong-MBK alliance.

The court said that Korea Zinc cannot restrict the voting rights of existing shareholders by invoking rules governing cross-shareholdings as a means of defending its management control. It did not provide further details.

Choi's side had orchestrated a move for Sun Metals Corp. (SMC), a second-tier subsidiary of Korea Zinc, to acquire a stake greater than 10 percent in Young Poong, thereby creating a circular shareholding structure.

Citing the formation of a cross-shareholding relationship under the Commercial Act, Choi's side restricted the voting rights attached to Young Poong's shares in Korea Zinc at the shareholder meeting.

The Young Poong-MBK alliance subsequently filed for an injunction to suspend the effect of the resolution, and a court partially granted the request in March last year.

In response, Choi's side took further steps to restrict Young Poong's voting rights by establishing a new cross-shareholding agreement involving Korea Zinc's Australian subsidiary, Sun Metals Holdings, and SMC, prompting the alliance to file a lawsuit on the merits in May last year.

ycm@yna.co.kr
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