Korea Zinc chairman accused of using activist platform to pressure Young Poong

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 3, 2025 4:06 PM KST

Young Poong said Tuesday that Korea Zinc Chairman Choi Yun-beom had joined forces with shareholder activist platform ACT to prepare an offensive against it amid a long-standing dispute over management rights of the world’s largest zinc smelter.

Young Poong has been aligned with private equity firm MBK Partners in the dispute against Choi since last year. The Young Poong–MBK alliance is currently the largest shareholder of the smelter.

According to Young Poong, ACT’s internal report from September 2024 used the phrase “attack on Y (Young Poong)” and outlined tactics such as reviewing the shareholder registry, filing injunctions and appointing temporary shareholder representatives.

The plan predates the Young Poong–MBK alliance’s tender offer on Sept. 13, 2024, which aimed to become the smelting firm’s largest shareholder.

“This undermines Choi’s claim of being a hostile M&A (merger and acquisition) victim,” a Young Poong official said.

ACT also amended part of its contract with Korea Zinc to include Young Poong Precision (now called KZ Precision), a company affiliated with Choi, apparently to exert influence over the management rights dispute.

A February 2025 ACT document noted that securing a Young Poong Precision-backed director was the “top priority,” although the candidate later lost in the vote at the regular shareholders’ meeting held in March.

Young Poong has raised several legal issues regarding the case. It argued that ACT, which claimed to represent minority shareholders, acted unethically by leveraging its influence over shareholder votes to intervene in the management dispute in exchange for financial compensation.

In particular, evidence that Korea Zinc’s management contracted with ACT to pursue strategies aimed at checking Young Poong could constitute breaches of fiduciary duty, as the contract and advisory fees were unrelated to Korea Zinc’s core business.

Additionally, ACT and Young Poong Precision could face potential violations of the Capital Markets Act.

The ACT document from February showed that Young Poong Precision had asked ACT to engage with shareholders on matters such as cumulative voting and stock dividends, which could be considered solicitation of proxy voting. However, they may have breached legal requirements by failing to provide proxy forms and supporting documents.

Young Poong Precision also did not list ACT as a related party in the proxy solicitation documents, raising concerns of incomplete disclosure.

As these matters involve important information related to proxy voting, they could result in corrective orders, suspension or prohibition of solicitation by financial authorities and, in some cases, criminal penalties.

“Any actions by specific parties that interfere with the company’s regular business operations can negatively affect both shareholders and employees,” a Young Poong official said. “We will take appropriate measures in line with legal and regulatory standards.”