CEO Ryu Young-jae said, "Governance should be evaluated based on performance, technology, and continuity, not short-term events..."MBK/Writing of Youngpoong

*This content was translated by AI.

Ryu Young-jae, CEO of Sustin Best, a domestic voting advisory firm, and former chairman of the Korea Corporate Governance Forum, evaluated the hostile M&A dispute with the Korea Zinc shareholders' meeting and made bitter comments about MBK and Youngpoong. Furthermore, the fundamental topic of 'for whom does corporate value and governance exist' was also presented.

On the 24th, CEO Ryu posted a message on his Facebook page under "Question of the Korea Zinc Crisis: Who Is Governance for" and said, "Shareholder capitalism from a long-term perspective is the work of protecting invisible assets such as technology, manpower, organizational culture, and supply chains and protecting companies from the temptation of maximizing short-term profits."

"What empirical and theoretical basis does the assumption that a company that has not properly controlled its own environmental and safety risks will 'manage' a company that has already secured the No. 1 global competitive advantage come from?" he said, effectively hitting Youngpoong.

Furthermore, he pointed out, "If there are repeated cases in which a company ranked No. 1 in the world through long-term investment and technology accumulation loses its management rights amid cooperation between public pension funds and private equity funds, who will innovate and venture in Korea?"

"Korea Zinc has recorded an annual operating profit surplus for 44 consecutive years as the world's largest zinc and precious metal smelter, achieved 104 consecutive quarters of operating profit since the mandatory disclosure in the 2000 quarter, and recorded a record-high performance with sales of 16.58 trillion won and operating profit of 1.23 trillion won in 2025," he said. "This is not a flash achievement, but a result of decades of process efficiency, recovery, product portfolio, and risk management capabilities," CEO Ryu said, giving a favorable evaluation of Korea Zinc, a party to the dispute.

On the other hand, regarding Youngpoong, he said, "It is analyzed that the main Seokpo smelter has continued to suffer from operational losses for the past five years due to environmental pollution and license violations, and the smelting sector has continued to suffer operational losses for the past five years," and pointed out, "The Seokpo smelter was suspended for 58 days due to water pollution and unauthorized installation of pipes, and additional administrative sanctions were repeated due to failure to comply with soil pollution purification obligations." This history raises questions about Youngpoong's ability to manage environmental and safety risks and its mid- to long-term competitiveness in the capital market, he added.

CEO Ryu also suggested the criteria for judging the dispute, saying, "Who has the higher ability to create corporate value between Korea Zinc, a company that has proven its performance, technology, and continuity, and Youngpoong, a company suffering from structural sluggishness and regulatory risks in its main business?"

CEO Ryu also raised another question, whether "defending a life-or-death decision" is a avoidance of responsibility or a director's necessity. Regarding Chairman Choi Yoon-beom's measures to defend his management rights, he said, "Isn't it an overly straightforward interpretation of the principles of directors' electioneering and management judgment based on shareholder capitalism?" and added, "If hostile acquisitions are highly likely to lead to the outflow of technology and manpower, reduction of long-term investment, or pressure to maximize short-term profits, defense can be a means to block mid- to long-term risks."

Regarding MBK Partners, CEO Ryu pointed out, "Private equity funds are structurally predicated on a finite investment period and high target returns, so we pursue a strategy with exit in mind within five to seven years after investment," adding, "In the case of MBK, it has also vowed to raise the value of Korea Zinc to a certain market capitalization, which presupposes sale and resale after a certain point."

Finally, CEO Ryu also mentioned the problem of the National Pension Service's voting structure. "Currently, the National Pension Service is effectively handing over the judgment of important agendas to outside personnel-centered measures, not the fund management headquarters, which has directly analyzed and invested in companies," he said. "This structure separates the logic of investment from the exercise of voting rights and increases the possibility of distorting the judgment by the power of politics, public opinion and interest groups."

CEO Ryu said, "No matter how much the management headquarters talks with companies, shareholder involvement will remain only in form once the perception that voting rights, the most powerful means, are outside." "In a structure where investment performance is distributed to the management headquarters and voting rights decisions are distributed over responsibility, neither side will be held responsible for failure until the end," he said. "Voting rights should be within the investment process, not outside."

Ryu's position is that a "holistic governance" perspective is needed in the wake of the Korea Zinc crisis. CEO Ryu said, "We need to break away from the frame of confining governance only to the transparency or formal independence of governance. In order to answer who can most sustainably grow the company and maximize the value of stakeholders in the long term, at least four pillars of finance, performance, technology and business model, strategy and investment, and ESG and risk management should be evaluated together."

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*This content was translated by AI.