*This content was translated by AI.
Critics are pointing out that Jang Hyung-jin, honorary chairman of Youngpung, who previously emphasized the importance of shareholders, has found his statements to be disconnected from reality, raising doubts about his credibility.
In the recent Korea Zinc general meeting, actual shareholder votes significantly favored the current management team over MBK or Youngpung, with whom Jang had aligned himself. In particular, during the vote for separately elected audit committee members—where major shareholders' voting rights are restricted and ordinary shareholders' opinions carry relatively greater weight—a large gap emerged between the two candidates, leading to evaluations that Jang's 2-year-old emphasis on "shareholders" has been put to the test.
From the early stages of Youngpung's hostile M&A attempt toward Korea Zinc, Jang cited "shareholders" as a primary reason for partnering with MBK. In an interview with a media outlet in 2024, he stated, "We must see how shareholders feel; only then will the company endure." He also reportedly explained that they should "take the path for shareholders," and when asked about potential backlash from local communities and labor unions, he is said to have responded that shareholder support would be their greatest strength.
Indeed, two years later, has Jang's earlier statement materialized in reality? Recent results from Korea Zinc's general meeting reveal a clear gap between his words and actual outcomes. In the most critical vote of the recently held extraordinary general meeting—the election of separately appointed audit committee members—Baek In-gyu, recommended by Korea Zinc's board of directors, received 81.8% approval based on voting rights present. In contrast, Park Yu-kyung, recommended by MBK and Youngpung, secured only 27.9% approval.
The election of separately appointed audit committee members applies the so-called "3% rule," which restricts voting rights for major shareholders and their special related parties. This structure means that the choices of ordinary shareholders—including foreign investors, institutional investors, and individuals—have a relatively greater impact on the outcome than competition between major shareholders over shareholdings. Consequently, many evaluations suggest that this election serves as a key indicator of ordinary shareholders' sentiments.
Among those participating in the recent Korea Zinc extraordinary general meeting vote, 98.3% of foreign investors and foreign institutional investors chose Baek. Among domestic individual shareholders, 79.1% voted in favor of Baek. The support rate for Baek among domestic institutional investors (excluding the National Pension Service) was 86.9%. In contrast, Park's support rates remained low at 20.9% among domestic individual shareholders and 13.1% among domestic institutional investors excluding the National Pension Service.
A similar trend appeared during the regular general meeting held in March. At that time, Korea Zinc's proposal for "the appointment of five directors" received 62.98% approval based on voting rights present, surpassing Youngpung and MBK's competing proposal for "the appointment of six directors," which garnered 52.21%.
Youngpung and MBK have consistently highlighted issues with the current management team's corporate governance and damage to shareholder value since the early stages of their hostile M&A attempt, positioning themselves as the right candidates to resolve these problems. However, even after two years, in voting structures where ordinary shareholders' opinions are significantly reflected, support has continued to lean toward the current management team.
The prevailing view in business circles is that both sides failed to demonstrate capabilities beyond their stated justifications, leading to this outcome. Since attempting the hostile M&A of Korea Zinc, MBK has faced a series of crises—including the Homeplus incident and the leakage of Lotte Card customer information—exposing it to reputational risks. Recently, MBK Chairman Kim Byung-ju was summoned by the Prosecution Service on charges of causing losses to investors by issuing short-term bonds despite anticipating a downgrade in Homeplus's credit rating before filing for corporate rehabilitation.
A business circle source stated, "The overwhelming vote difference observed in the audit committee election, where major shareholders' voting rights are restricted, can be seen as evidence that MBK and Youngpung's arguments regarding management takeover and enhancement of shareholder value have not gained sufficient persuasiveness among ordinary shareholders."
Youngpung has suffered from poor performance, recording losses for three consecutive years until last year. Even in the first half of this year, when it successfully turned a profit, its operating profit remained modest. In contrast, Korea Zinc recorded its highest-ever semi-annual results during the same period. Therefore, Youngpung and MBK's justifications have inevitably struggled to persuade shareholders.
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*This content was translated by AI.
