Lee Hyo-jin covers the Bank of Korea, the banking industry and broader financial news. Her previous beats include foreign affairs, North Korea and general reporting on Korean society.
CalPERS opposes reappointment of Korea Zinc Chairman Choi Yun-beom
Korea Zinc Chairman Choi Yun-beom speaks during a press conference at Korea Chamber of Commerce and Industry headquarters in Seoul, Nov. 13, 2024. Korea Times photo by Choi Joo-yeon
By Lee Hyo-jin
California Public Employees' Retirement System (CalPERS) — the largest public pension fund in North America — has decided to vote against the reappointment of Korea Zinc Chairman Choi Yun-beom, as the zinc smelter is set to hold a shareholders' meeting on Tuesday.
According to industry sources Monday, CalPERS decided to oppose the reappointment of Choi and also vote against audit committee candidates Kim Bo-young and Lee Min-ho, both recommended by Korea Zinc, citing concerns over "damage to corporate value and infringement of shareholder rights."
The decision comes after Korea's National Pension Service (NPS) said Friday it would abstain from voting on Choi's reappointment and vote against the appointment of Kim and Lee.
NPS' decision was interpreted by watchers as withholding confidence in the current management.
Industry observers say the series of moves by major pension funds reflects broader concerns about the effectiveness of board oversight and the functioning of internal control mechanisms under Choi's leadership.
"The consistency of voting decisions by major pension funds, including NPS and CalPERS, indicates that Korea Zinc's corporate governance may not sufficiently align with the protection of shareholder value and investor interests," an investment banking industry source said. "The absence of affirmative support for the chairman's reappointment in itself reflects the level of confidence the market is willing to extend to the current leadership."
The developments come a day ahead of the company's annual shareholders' meeting, widely seen as a pivotal moment in the prolonged management control dispute at the world's largest zinc smelter.
Choi has been locked in a management control battle with the alliance of Young Poong, Korea Zinc’s largest shareholder, and private equity firm MBK Partners, since the latter launched a tender offer in September 2024.
Key agenda items at the upcoming meeting include Choi's reappointment and the composition of the board.
Earlier this month, the world's largest proxy advisory firm, Institutional Shareholder Services (ISS), advised shareholders to oppose Choi's reappointment.
ISS expressed its opinion in a proxy analysis report issued on March 9, citing controversy over the restriction of Young Poong's voting rights through cross-shareholding arrangements, as well as questions about the adequacy of board-level deliberation during major strategic investment decisions.