Investors in Korea Zinc Co. are set to decide the outcome of a fierce, months-long battle for control at the company’s crucial shareholder meeting on Thursday. The vote will determine the composition of the company’s board and establish its strategic direction moving forward.
As the world’s leading producer of refined zinc, Korea Zinc has been embroiled in a heated dispute between its CEO, Yun B. Choi, and its largest shareholder, Young Poong Corp. This feud intensified in September when Young Poong, backed by private equity firm MBK Partners Ltd., made an unsolicited takeover bid.
The company rejected the offer and responded by launching a share buyback program followed by a proposed share issue—though the latter was eventually canceled and criticized by Choi as a “tactical error.” Korea Zinc has since warned that the ongoing conflict has distracted management and employees, and it has expressed concerns about a challenging outlook.
The meeting, initially scheduled for Thursday morning at a Seoul hotel, experienced delays as both sides worked to count proxy statements. Meanwhile, unions staged a protest at the venue. The Korea Zinc union has threatened a strike if the MBK Partners-Young Poong consortium gains control of the board.
Shareholders will now be asked to vote on two distinct visions for the company’s future. The MBK Partners-Young Poong alliance, which holds a significant 41% stake, is proposing the addition of 14 new directors to the existing 12-member board. If successful, this move could effectively marginalize Choi from his leadership role. However, following Korea Zinc’s last-minute share buyback from Young Poong, it remains uncertain whether the latter will fully exercise its voting rights.
On the other side, Korea Zinc has garnered the support of approximately 35% of shareholders and had initially pushed for a cumulative voting system designed to strengthen the voice of minority shareholders and the company itself. However, a court injunction blocked this plan. Korea Zinc is now aiming to appoint seven new directors to retain control over the board.
The outcome of this battle is about more than just Korea Zinc’s corporate governance. It reflects broader trends in South Korea, where activism and bold private equity moves are rare but growing. The company plays a crucial role in global efforts to reduce reliance on Chinese dominance in critical industries. Korea Zinc, including its affiliates, accounts for 12% of the world’s zinc produced outside of China, a vital component for electric vehicle batteries. Additionally, the company is responsible for 5% of global lead and about 9% of silver production outside of China, according to Bloomberg analysis.
In the lead-up to the vote, advisors have issued contrasting recommendations. Institutional Shareholder Services (ISS) has advised shareholders to reject all of Korea Zinc’s proposed directors and its cumulative voting system, suggesting that the system would help Choi maintain control. In contrast, Glass Lewis has endorsed both the new voting system and the board candidates nominated by Korea Zinc.
The National Pension Service (NPS), South Korea’s largest pension fund, has expressed support for the cumulative voting system and intends to vote in favor of limiting the board to 19 members. It will also back three directors nominated by both Korea Zinc and the MBK Partners-Young Poong alliance. NPS held a 4.51% stake in Korea Zinc as of October.
Despite a brief uptick in early trading, Korea Zinc shares fell about 1% by mid-morning, reflecting the ongoing uncertainty surrounding the company’s future direction.
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