Yongpo's Jang Young-jin's Choice of MBK Re-evaluated for Reliability Two Years Later

*This content was translated by AI.

Two years after the management rights dispute between Korea Zinc and Yongpo-MBK began, the evaluation made by Jang Young-jin, a former advisor to Yongpo, at the time that MBK, a private equity firm operator, was a "reliable company," is being re-examined both inside and outside the industry. Following Homeplus, one of MBK's largest portfolio companies, filing for corporate rehabilitation, controversies have continued surrounding MBK's management methods and responsibilities.

There are many views that the basis for Jang advisor's judgment in choosing MBK as a partner to manage Korea Zinc has lost its credibility.

Homeplus filed for corporate rehabilitation in March 2025. Since then, criticism has continued over MBK's management strategies, including leveraged buyouts (LBO) through which it acquired Homeplus and asset sales, spreading into social controversy.

The Prosecution Service believes that Kim (Chairman) and other members of the MBK management team, aware of the possibility of a downgrade in Homeplus' credit rating, issued large-scale short-term bonds before filing for corporate rehabilitation, causing losses to investors. Kim (Chairman) and others are suspected of fraud under the Special Act on Economic Crimes and violations of the Capital Markets Act. Previously, the Prosecution Service summoned MBK Vice Chairman Kim Kwang-il twice in July last year on suspicion of violating the Special Act on Aggravated Punishment for Specific Economic Crimes and the Capital Markets Act.

However, in January this year, the court rejected the arrest warrant requested by the Prosecution Service against four executives, including Kim (Chairman) and Vice Chairman Kim Kwang-il, stating that "there is insufficient evidence to justify detention." MBK has maintained its position that efforts to normalize the company through corporate rehabilitation have been misunderstood during the investigation process in relation to the Homeplus incident.

In response, there are calls within the business community to re-evaluate Jang advisor's judgment on MBK with a cold eye. This is because concerns have long been raised about the deterioration of the financial conditions of companies acquired by MBK through LBO methods even before the Homeplus incident. Representative cases include cable broadcasting operator SO DLive and outdoor brand Napa. These companies have also continuously faced criticism through media reports regarding deteriorating financial conditions due to increased financial costs from borrowing.

Given that Jang advisor himself stated that he "conducted various investigations and judged MBK to be a reliable company," the extent to which existing investment cases and management performance were evaluated during the partner selection process at the time is once again drawing attention.

Over the past two years, as the management performance of Korea Zinc and Yongpo has diverged, Jang advisor's judgment at the time is being re-examined. Despite the management rights dispute, Korea Zinc recorded its largest-ever profit last year and achieved record-breaking half-year profits this year. It also continued to record 106 consecutive quarters of operating profits. Furthermore, it is being recognized as a key player in global supply chain competition by announcing projects such as "Project Crucible," the construction of an integrated smelter in Tennessee, USA.

In contrast, Yongpo's performance showed a sluggish trend. Yongpo recorded an operating loss of 259.2 billion won last year, marking its third consecutive year of losses.

Ultimately, even based on the rationale Jang advisor presented two years ago when partnering with MBK—long-term company growth and enhancement of corporate valuation—sufficient doubts can be raised.

Management crises have emerged in MBK's representative portfolio companies, while Yongpo, which has emphasized a professional management system under Jang advisor, is also experiencing low utilization rates at Seopo Smelter and poor performance. In contrast, Korea Zinc, led by the current management team, continues to achieve results in terms of performance and investment despite the management rights dispute.

As a result, there is growing skepticism toward Jang advisor's statement two years ago: "If someone better than us comes along and raises the company's value, that would be even better, and the company will last longer."

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*This content was translated by AI.