Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Young Poong accuses Korea Zinc chairman of 'moral hazard' over friend's embezzlement verdict
Korea Zinc Chairman Choi Yoon-beom speaks during a press conference at the Korea Chamber of Commerce and Industry in central Seoul, Nov. 13, 2024. Yonhap
By Yi Whan-woo
Young Poong, the largest shareholder of Korea Zinc, accused Korea Zinc Chairman Choi Yoon-beom, Thursday, of “moral hazard and breakdown of internal controls” in connection with a court ruling earlier this week against the CEO of a private equity firm in which Korea Zinc invested.
The accusation is the latest development in the contentious feud between Young Poong, together with its ally MBK Partners, and Korea Zinc, which has spawned a yearlong battle to secure management control of Korea’s largest zinc smelter.
“This ruling is not merely about a failed investment — it exposes the moral hazard and breakdown of internal controls under Chairman Choi’s leadership,” Young Poong said in a statement.
The statement referred to a guilty verdict handed down on Tuesday by the Seoul Southern District Court against Ji Chang-bae, CEO of private equity firm One Asia Partners.
Ji was sentenced to three years in prison with a four-year suspended term for embezzlement, as the court ruled that he misused the company’s fund assets for personal purposes.
According to legal sources, the court explicitly stated that “the investors in the victimized fund were not general investors but had a special relationship with the defendant.”
Young Poong focused on this special relationship, highlighting that Ji and Choi are known to have been middle school classmates.
The statement also noted that Korea Zinc invested a total of 560 billion won ($389 million) in One Asia Partners shortly after Choi was promoted to chairman in 2022.
It further referenced the founding of One Asia Partners in 2019, suggesting that the firm’s market capability had not yet been proven, and that Korea Zinc’s investment at that time was made “purely based on Choi’s personal friendship with Ji.”
“The company bypassed all basic corporate procedures required of a listed company — including board reporting, risk assessment and external due diligence,” Young Poong said.
It argued that Ji’s conviction for embezzlement demonstrates that “Korea Zinc’s compliance framework was effectively nonexistent.”
“The conviction is not just about one fund manager’s wrongdoing — it is a symbolic case revealing how Korea Zinc, under Chairman Choi, has operated without proper checks or accountability,” the statement said. “The company’s internal oversight functions had collapsed, allowing billions of won in corporate funds to be managed at the sole discretion of the chairman.”
Young Poong also emphasized that the court acknowledged Korea Zinc’s investment in One Asia was not a typical corporate financial decision but rather “money entrusted to a friend.”
“Shareholders must now hold Chairman Choi and his management team fully responsible for the reckless use of corporate capital,” the statement concluded.