*This content was translated by AI.
-If MBK and Youngpoong do not pass the six new directors...We don't meet the legal requirements. We'll have another shareholders meeting
With less than three weeks left before the Korea Zinc shareholders' meeting, there is also a strong battle over the agenda of the shareholders' meeting amid a management dispute.
In particular, MBK Partners (MBK), which has been on the defensive due to the Homeplus crisis, as well as its management capabilities and investigations into allegations of fraud, and Youngpoong, who has been embroiled in environmental controversy due to the failure to implement an integrated environmental permit, are struggling to turn the tide around the agenda.
MBK and Youngpoong are putting forward the reasons they have been shouting so far, such as "advanced governance" and "improving shareholder value," but the inside is not simple. Looking at the shareholder proposals, the industry's assessment is that there are demands that do not match the actual slogan. In other words, the focus is on disputes and checking current management, but the "authenticity" itself for actual governance advancement is questionable.
According to the industry on the 6th, MBK and Youngpoong submitted shareholder proposals for Korea Zinc, including ▲ appointment of six directors ▲ introduction of executive officer system ▲ face division ▲ conversion of arbitrary reserves to undiscovered retained earnings ▲ stipulation of directors' obligation to be faithful to the general shareholders' meeting when issuing new shares ▲ appointment of the chairman of the board of directors as chairman of the general shareholders' meeting (appointment of temporary chairman).
Among them, the agenda that MBK and Youngpoong side and Korea Zinc are most sharply confronting is the "number of directors" agenda. While MBK and Youngpoong proposed six people, they are putting five Koreans ahead of them.
MBK and Youngpoong claim six people because the term of six people actually expires. The problem is that such a proposal neglects the obligation of companies to accept the revision of the commercial law revised last year.
Korea Zinc, which currently has an upper limit of 19 directors, currently has all 19 members in place, and the term of six members will expire at this shareholders' meeting. Therefore, if six board members are appointed this time, the upper limit of 19 will be full, and there will be no room to select a separate auditor who must be applied from September this year under the amendment of the Commercial Act. Currently, the number of separate audit committee members should be increased to two, but it could lead to a so-called illegal state in which it cannot actually be implemented.
This is a contradictory argument to the fact that many other listed companies are preemptively responding to the problems they will face after September this year by appointing the position of the audit committee, which must be elected separately at this shareholders' meeting.
If Korea Zinc fails to have two audit committee members to be elected separately this time, the company will be burdened with additional costs such as having to hold an extraordinary shareholders' meeting later. In response, the legal community believes that MBK and Youngpoong's tricks to actually open another temporary shareholders' meeting and put the burden on the company to be in violation of the law are hidden.
This is why the industry has evaluated that the company has proposed an agenda based on its advantages and disadvantages in the extension of the dispute without taking into account negative factors such as so-called costs and side effects.
Another agenda for MBK and Youngpoong deserves to be called the so-called 'poison clause'. Although the articles of association stipulate the director's obligation to be faithful to shareholders, some criticize that it is an argument to put a provision in the articles of association that virtually neutralizes the commercial law.
In line with the purpose of the amendment to the Commercial Act, the company advocates the stipulation of the general 'director's duty to be faithful to shareholders', while MBK and Youngpoong insist on stipulating the director's duty to be faithful in the event of new shares in the articles of association.
Korea Zinc's position is that it is claiming that the purpose of the law is to stipulate the director's obligation to be faithful to shareholders even to the third-party allocation paid-in capital increase, which recognizes exceptions in the commercial law due to financial and technical reasons.
Regardless of strategic investment or the need for a company, investment can be blocked with the opposition of some shareholders. This is a toxic clause that can be a "fatal blow" to securing future new growth engines for companies.
In particular, MBK and Youngpoong have already shown that they did not pay attention to the interests of general shareholders when Korea Zinc announced the U.S. Integrated Smelter (Crucible Project) at the end of last year. He said he was in favor of the Crucible project and applied for an injunction against a third-party capital increase for strategic investors such as the U.S. government, which is a "precondition" for the project. Even after the provisional injunction was rejected, it is known that it has continued to "check" the Crucible project by appointing a global law firm as a lobbyist in the U.S.
Since the news of the U.S. smelter construction, Korea Zinc's stock price has risen from 1,518,000 won on December 12 last year, just before the announcement of the Crucible project, to 2,050,000 won on the 26th, before the outbreak of the Iranian crisis, and its corporate value is being greatly reevaluated along with high market valuations and investors' interest.
Meanwhile, MBK and Youngpoong's back-and-forth shareholder proposals are also under fire. Last year, Korea Zinc proposed the introduction of an executive officer system at an extraordinary shareholders' meeting, but the agenda was rejected as it changed its position on the day of the shareholders' meeting and opposed it. At the same general shareholders' meeting, the division of face value of one-tenth proposed and approved by Korea Zinc was blocked even by filing a court injunction. The case is still pending in the Supreme Court. In other words, they are 'recycling' the agenda they blocked themselves in just one year. This is why there are criticisms that these incoherent claims could eventually hinder the stable operation of the company.
There are also voices criticizing the "morality" of MBK and Youngpoong. MBK and Youngpoong officials who attended the Korea Zinc board meeting held on the 23rd informed the core contents before Korea Zinc disclosed the contents of the board. This is a violation of Article 382-4 of the Commercial Act, which stipulates 'obligations to comply with confidentiality of directors and auditors'. According to the regulations, it is pointed out that directors may violate the provision that the company's business secrets, which they have learned in their duties, should not be disclosed to the outside world.
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*This content was translated by AI.
