#South Korea #Seoul #Korea Zinc #MBK Partners #Young Poong

Court Ruling: Young Poong’s Voting Rights Restored

In a landmark decision, the Seoul District Court has declared that the restrictions imposed on Young Poong's voting rights during Korea Zinc’s extraordinary shareholders' meeting on January 23, 2025, are unlawful. This ruling marks a significant victory for both Young Poong and MBK Partners, who are major stakeholders in Korea Zinc. The court also suspended the effectiveness of several resolutions adopted during this meeting, fundamentally altering the governance landscape at Korea Zinc.

Details of the Court’s Decision

The court's ruling, issued on March 7, 2025, highlighted that the limitation of Young Poong’s voting rights fell afoul of Article 369, Paragraph 3 of the Commercial Code of Korea. As a result, the effectiveness of various resolutions, including the decision to impose a cap on the number of directors, has also been put on hold. These resolutions were controversial and deemed flawed due to substantial procedural errors.

More specifically, among the suspended resolutions were those addressing:

• - The imposition of a cap on the number of directors.
• - The stock split.
• - The appointment of the chairman from external members.
• - The alteration of the dividend cut-off date.
• - The introduction of quarterly dividends.

In addition to suspending these resolutions, the court further ruled that the seven directors appointed by Korea Zinc, who were believed to have been designated through a flawed process, are prohibited from fulfilling their roles as external directors until further notice.

Implications for Korea Zinc’s Future Governance

While the ruling confirmed the retention of the decision to amend the company's bylaws to allow cumulative voting, the court's suspension of the director cap effectively opens the door for more flexible governance practices moving forward. Young Poong and MBK Partners are now poised to regain significant control over Korea Zinc, enabling them to influence future corporate decisions more effectively.

As the company gears up for its annual general meeting later this month, the implications of this ruling are profound. Young Poong and MBK Partners are set to propose 17 candidates for the board of directors underscoring their intention to assert influence and drive the company’s future in a direction that aligns with shareholders' interests.

In a statement, a representative for Young Poong expressed optimism regarding the court's decision. They emphasized their commitment to revitalizing corporate governance frameworks and ensuring that stakeholder value is maximized. They asserted, “We will make every effort to restore the corporate governance and shareholder value of Korea Zinc through a fair and transparent shareholders' meeting.”

Conclusion

This court ruling not only reinstates Young Poong's voting rights but also paves the way for substantial changes in how Korea Zinc operates at a governance level. The outcome illustrates the importance of shareholder rights and the need for transparency in corporate governance, particularly in companies with complex ownership structures.

As Korea Zinc prepares for its forthcoming shareholders' meeting, all eyes will be on how the dynamics shift with Young Poong and MBK Partners at the forefront of decision-making. Stakeholders will be keenly observing whether the court's decisions lead to more equitable practices and stronger oversight following this ruling.