"Objection to the appeal by Vice Chairman Jang Hyung-jin rejected"... Supreme Court upholds order for submission of documents on 'MBK·Yeongpoor Management Cooperation Contract'

*This content was translated by AI.

The Supreme Court has finally confirmed the legitimacy of a court order requiring the submission of documents regarding the management cooperation contract signed between MBK and Yeongpoor ahead of their public tender offer for Korea Zinc shares. On the 1st, it was announced that the Supreme Court rejected an appeal filed by Vice Chairman Jang Hyung-jin of Yeongpoor, who had objected to a court order requiring the submission of all documents related to the management cooperation contract and subsequent agreements signed among three parties: KZ Precision (KJ Precision), Korea Enterprise Investment Holdings, a special purpose vehicle (SPC) established by private equity fund MBK Partners, and Yeongpoor.

As a result of this decision, the court's ruling requiring the submission of the 'Basic Agreement on Management Cooperation' signed on September 12, 2024, between Korea Enterprise Investment Holdings, an SPC established by MBK, Yeongpoor, and Vice Chairman Jang, along with all subsequent agreements, has been upheld.

Previously, the Seoul Central District Court issued a document submission order regarding the contract last December. Vice Chairman Jang filed an immediate appeal against this ruling; however, the Seoul High Court rejected it in April, after which he filed an appeal to the Supreme Court.

The appellate court at the time determined that the contents disclosed through documents such as the public tender offer report were merely summaries of the key terms of the contract and could not be considered fully disclosed, including specific methods for exercising the call option granted to Korea Enterprise Investment Holdings. The ruling emphasized the need to investigate the contract as evidence in the main lawsuit, given the possibility that undisclosed contents of the contract could affect the amount of damages suffered by Yeongpoor.

This decision is expected to impact the approximately 930 billion won lawsuit filed by KZ Precision against Vice Chairman Jang and other Yeongpoor directors. KZ Precision argues that the management cooperation contract, which includes provisions such as granting Korea Enterprise Investment Holdings a call option to acquire Korea Zinc shares held by Yeongpoor under certain conditions, was concluded to the disadvantage of Yeongpoor and in favor of MBK, thereby damaging the interests of the company and its general shareholders.

The disclosed management cooperation contract includes provisions requiring that voting rights over Korea Zinc shares held by Yeongpoor and its related parties be exercised with the consent of Korea Enterprise Investment Holdings. Pursuant to the contract, Korea Enterprise Investment Holdings may exercise call options, pre-emptive purchase rights, and drag-along rights regarding the Korea Zinc shares held by Yeongpoor.

The Korea Zinc shares previously held by Yeongpoor were contributed in kind to a limited liability company named YPC (YPC) in March last year. YPC also agreed to bear the same rights and obligations as existing shareholders under the management cooperation contract regarding the exercise of voting rights over those shares.

A KZ Precision official stated, "The Supreme Court's decision has finally upheld the court's ruling that the MBK-Yeongpoor management cooperation contract must be confirmed as evidence," adding, "We hope that the main lawsuit will thoroughly clarify how the rights and conditions set on Korea Zinc shares have affected the interests of Yeongpoor and its general shareholders."

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*This content was translated by AI.