Young Poong reaffirms MBK partnership key to safeguarding Korea Zinc’s governance

Korea Zinc Chairman Choi Yun-beom speaks during a press conference at the Korea Chamber of Commerce and Industry in Seoul, Nov. 13, 2024. Korea Times photo by Choi Joo-yeon

By Jun Ji-hye

• Published Sep 30, 2025 4:36 PM KST
• Updated Sep 30, 2025 4:43 PM KST

Young Poong said Tuesday that its collaboration with private equity firm MBK Partners in a dispute to secure managerial control of Korea Zinc was unavoidable.

The company reaffirmed that it will continue to act as the largest shareholder of the world's largest zinc smelter to protect corporate value and restore stable management.

The remarks were made in response to claims from Korea Zinc Chairman Choi Yun-beom’s side that Young Poong had relinquished its controlling shareholder status in Korea Zinc to MBK, and that the MBK-Young Poong alliance’s tender offer amounted to a hostile takeover.

“The allegation that we transferred our controlling stake to MBK is entirely false," a Young Poong official said. "We continue to be the largest shareholder of Korea Zinc and, as a responsible majority shareholder, place the company’s long-term stability and growth above all else."

Young Poong joined forces with MBK and launched a tender offer on Sept. 13 of 2024 to oust Choi.

According to the management cooperation agreement disclosed at the time, the two parties agreed that, when forming a new Korea Zinc board of directors, MBK-nominated directors would outnumber Young Poong-nominated directors by one.

They also agreed that, following the tender offer, voting rights corresponding to “50 percent plus one share” of their combined holdings would be exercised according to MBK’s proposal.

Regarding this, Korea Zinc, currently controlled by Choi, issued a statement questioning whether MBK had secured a call option to buy Young Poong’s Korea Zinc shares at a discounted price, arguing that “this effectively amounts to Young Poong relinquishing its controlling stake in the company to MBK.”

The company further warned, “If it is true that Young Poong entered into an agreement to transfer its Korea Zinc shares at a low price, the board of Young Poong at the time would likely face allegations of breaching their fiduciary duties.”

In response, Young Poong countered that its partnership with MBK was necessary to address Choi’s mismanagement.

Young Poong claimed that Choi, who is a minority shareholder with only a 1.8-percent stake and not the controlling shareholder, had triggered a management dispute by diluting about 16 percent of the company’s equity through reckless third-party share issuances and stock swaps, significantly harming other shareholders’ proportional interests.

“Choi has repeatedly engaged in unlawful actions, using company funds to defend his personal control rather than to drive new growth for the business,” the Young Poong official said.

In fact, Korea Zinc’s financial health has deteriorated significantly under Choi's leadership over the past year. Net cash fell by 4.1 trillion won ($2.9 billion), while borrowings rose by 3.7 trillion won, pushing net debt to 3.3 trillion won.

During the same period, payments for legal and consulting services totaled 324.4 billion won, with at least 100 billion won believed to have been used to protect Choi’s personal control.

“Korea Zinc is not the property of any single individual,” the Young Poong official said. “As the largest shareholder, Young Poong will remain resolute against distorted claims and continue its responsible efforts to normalize management while safeguarding shareholder interests and the company’s value.”