Young Poong and MBK Partners have decided to withdraw a lawsuit seeking to nullify the resolutions of Korea Zinc's extraordinary shareholder meeting held in January last year. The decision came as the outside directors challenged in the suit had their duties suspended by the court and subsequently all resigned, meaning most of the lawsuit's objectives had been achieved.
Young Poong and MBK announced on the 4th that they had decided to withdraw the lawsuit seeking to nullify the resolutions of Korea Zinc's extraordinary shareholder meeting held in January 2025. "We informed the court of our intention to withdraw the suit, having determined that all the objectives for which the lawsuit was filed have been achieved," a Young Poong-MBK representative said. "As part of the procedural process under litigation law for a comprehensive resolution of the case, the court issued a recommendation for settlement on the 30th of last month."
The lawsuit was filed based on the view that Korea Zinc's extraordinary shareholder meeting at the time had been conducted unlawfully, infringing on the shareholder rights of Young Poong and MBK. The day before the January 2025 meeting, SMC, an overseas affiliate of Korea Zinc, acquired more than 10% of Young Poong's shares. On the day of the meeting, Korea Zinc fully restricted the voting rights held by its largest shareholder, Young Poong, on the grounds that a cross-shareholding relationship under the Commercial Act had been formed. The Seoul Central District Court ruled that such a restriction of voting rights was unlawful and issued an injunction suspending the duties of the four outside directors appointed at the meeting. The four outside directors subsequently resigned.
Regarding the "stock split and the related amendment to the articles of incorporation" that passed at the meeting, Young Poong and MBK said, "We determined that executing the stock split would benefit minority shareholders more than canceling it on the grounds of procedural flaws." Young Poong and MBK also proposed an amendment to the articles of incorporation for a stock split in the form of a shareholder proposal at the regular shareholder meeting in March this year.
Legal action is expected to continue against Korea Zinc Chairman Choi Yoon-birm and President Park Ki-deok. "Chairman Choi and President Park unlawfully restricted the largest shareholder's voting rights by forming an evasive cross-shareholding arrangement using overseas affiliates," a Young Poong-MBK official said. "We will pursue their civil and criminal liability, as well as liability for violations of the Fair Trade Act, to the very end."
