Controversy over the preemptive reflection of the "revised commercial law" against Youngpoong's regular shareholders' meeting

*This content was translated by AI.

Youngpoong, who is attempting to take control of the board of directors of Korea Zinc with MBK Partners, passed a proposal to expand two separate audit committee members, one of the revised commercial law, at its regular shareholders' meeting this year. At the Korea Zinc regular shareholders' meeting held just before, the company's shareholders' meeting passed the same proposal that it had publicly opposed. This is the background of bitter criticism that Youngpoong deceived other shareholders of Korea Zinc along with his inconsistent moves.

According to the Financial Supervisory Service's electronic disclosure on the 26th, at the Youngpoong regular shareholders' meeting held the previous day, the "partial change in the articles of incorporation to raise the number of separate elected members of the audit committee" was passed with an overwhelming 97.8% approval rating. Along with the passage of the agenda, lawyer Jeon Young-joon of the law firm Kim Jang-ri and Huh Sung-kwan, head of the Korea Eurasia Institute, were elected as separate audit committee members.

The proposal to expand the number of separate audit committee members to two was first proposed by Youngpoong shareholder KZ Precision to strengthen the independence and supervisory function of the board of directors by preemptively applying the revised commercial law to be implemented in September. Youngpoong's board of directors said it had planned to present the same contents as the KZ precision proposal as a regular shareholders' meeting agenda and passed it without change.

However, there is bitter criticism from the market about Youngpoong's move. At the Korea Zinc regular shareholders' meeting held on the 24th, the board of directors and shareholders appealed for support for the expansion of two separate audit committee members in preparation for the implementation of the revised commercial law, but Youngpoong and MBK Partners expressed their opposition to the disclosure, citing "time allowance."

An agent of MBK, Youngpoong's hostile M&A partner and co-exercise voting rights, got a say at the Korea Zinc regular shareholders' meeting and said, "We still have time to revise the commercial law following the expansion of separate election audit committee because the effective date is September this year," adding, "We express our opinion that we cannot approve it as shareholders."

After MBK's agent's public opposition remarks, a Korea Zinc shareholder expressed concern, saying, "If we do not select one separate auditor after revising the articles of incorporation at this regular shareholders' meeting, the company's efficiency will decrease." However, the agenda was eventually rejected amid opposition from Youngpoong and MBK. As a result, Korea Zinc is in danger of being sanctioned by the authorities if it does not appoint additional separate election audit committee members before September.

As such, it is pointed out that Youngpoong deceived Korea Zinc shareholders by opposing the pre-emptive application of the revised commercial law due to "time allowance" and passing the related agenda immediately at his shareholders' meeting.

Analysts also say that the current management proposed at the Korea Zinc regular shareholders' meeting was actively opposed because it would make it more difficult for Youngpoong and MBK to take control of the board of directors of Korea Zinc more difficult. It is also widely evaluated that Youngpoong and MBK have explicitly revealed the perception that their interests in controlling the board of directors are more important than Korea Zinc's management stability and consistency with government policies.

Meanwhile, Youngpoong, who proposed "improving governance and enhancing shareholder value" in the name of Korea Zinc's hostile M&A, seems to have rejected KZ Precision's shareholder proposal of upgrading the △ESG committee to a committee within the board of directors △ introducing in-kind dividends △ introducing quarterly dividends. All of those agendas were rejected with more than 86% disapproval. Youngpoong is a place where Jang Hyung-jin's family, who has more than half of the stake, exerts overwhelming control.

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*This content was translated by AI.