[메트로신문] The management rights dispute between Korea Zinc and the consortium of Youngpoong and MBK Partners will reach a turning point this week. The outcome of the "preliminary injunction for allowing voting rights" application, which is a key issue in the upcoming regular shareholder meeting vote, will be decided this week.

According to industry sources on the 23rd, Korea Zinc will hold its regular shareholders' meeting at the Mondrian Hotel in Yongsan, Seoul, on the 28th. The agenda for this meeting includes seven items, such as: ▲setting a cap of 19 directors

The key issue of the shareholders' meeting is the composition of the board of directors. During the previous extraordinary shareholders' meeting, a resolution passed with Youngpoong's voting rights restricted, but it is now subject to re-evaluation following a court ruling that invalidated it. If the resolution is passed again, the number of directors will be limited to 19 or fewer. If it is rejected, the number will be set at either 12 or 17. The MBK consortium is in a favorable position to secure a majority if the number is set at 17.

Once the number of directors is confirmed, a vote will be held on the director candidates recommended by both sides. Based on the selection of either 12 or 17 directors, Korea Zinc has recommended 8 candidates (7 following the resignation of Kwon Jae-yeol), while MBK and Youngpoong have nominated 17 candidates.

Currently, the board of directors is composed of 11 members from Chairman Choi Yun-beom's side of Korea Zinc and 1 member from Youngpoong and MBK's side. Depending on the outcome of the shareholders' meeting, the current board composition could be changed.

At present, Korea Zinc's shareholding structure shows that the Youngpoong and MBK consortium holds 40.9%, while Chairman Choi Yun-beom's side holds 34.35%, which gives an advantage to Youngpoong. However, if the cumulative voting system, which favors minority shareholders, is applied, the outcome remains uncertain.

In response, the MBK consortium filed for a preliminary injunction to allow voting rights on the 18th. If the court accepts the request from the MBK consortium, the Korea Zinc management rights dispute could enter a new phase.

Korea Zinc is attempting to limit Youngpoong's voting rights by using regulations related to cross-shareholding. It claims that its Australian subsidiary and joint-stock company, Sun Metal Holdings (SMH), received a stock dividend of 10.3% of Youngpoong's shares from Sun Metal Corporation (SMC), thereby establishing a cross-shareholding relationship between Korea Zinc and Youngpoong. As a result, Korea Zinc plans to restrict Youngpoong's voting rights at this shareholders' meeting.

In response to this move, the MBK consortium filed for a preliminary injunction at the Seoul Central District Court, requesting that voting rights be allowed. On the 21st, the first hearing was held, and the court's Civil Division 50 is expected to make a decision on whether voting rights will be allowed as early as this week. If the injunction is rejected, it will strengthen Chairman Choi Yun-beom's position in defending his management rights. Conversely, if the court permits Youngpoong's voting rights, the Youngpoong side, with a higher shareholding, could gain an advantage in the management rights dispute through the shareholders' meeting.

However, the recent situation with Homeplus has become a variable, as public sentiment toward MBK has reached its lowest point. The ongoing corporate rehabilitation process of Homeplus has led to suspicions of MBK's "eat-and-run" behavior, which may influence the judgment of major institutional investors, such as the National Pension Service, as well as minority shareholders. Notably, the National Pension Service has made it clear that it will not invest in MBK's hostile M&A activities, making it likely that it will support the current management at Korea Zinc’s shareholders' meeting. Additionally, as the repercussions of the Homeplus crisis spread across suppliers, the financial sector, and investors, there is growing pressure to expel MBK, the major shareholder, from the market.

Furthermore, the political community’s stance toward MBK is also negative. Recently, the National Assembly’s Political Affairs Committee prepared an urgent inquiry into the Homeplus crisis and had planned to summon Kim Byung-ju, the chairman of MBK, as a witness. However, Chairman Kim notified the committee that he would not attend, citing a business trip to Shanghai and Hong Kong starting on that day.

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