Court Ruling Declares Voting Rights Restriction for Young Poong as Illegal

In a significant legal development, the Seoul Central District Court has ruled that the limitations placed on Young Poong's voting rights during the extraordinary shareholders' meeting of Korea Zinc on January 23 were unlawful. This verdict suspends the validity of various decisions made during that meeting, including a resolution to limit the number of directors.

The court made its determination on March 7, responding to a request from Young Poong and MBK Partners — the largest shareholders of Korea Zinc. The ruling asserted that the limitation of Young Poong’s voting rights was inconsistent with Article 369(3) of the Commercial Act, thus rendering several decisions from the meeting invalid.

Among the decisions affected is the proposal to cap the number of directors, which had been set at a controversial limit of 19. The ruling further interrupts the duties of seven directors nominated by Korea Zinc, whose appointments were made under procedures deemed to have significant procedural flaws.

As a consequence, these seven directors will no longer be able to perform their roles as external directors until further notice. The court’s judgment also confirms that while a recent amendment introducing cumulative voting will remain in effect, the prior restrictions on the number of directors are now void.

This court decision is seen as a pivotal victory for Young Poong and MBK Partners, who are now positioned to regain control over Korea Zinc. They enthusiastically welcomed the ruling, highlighting its implications for corporate governance and shareholder value.

Looking forward, a new board of directors is expected to be elected during the upcoming annual general meeting scheduled for the end of March. Young Poong and MBK Partners have indicated their intentions to propose 17 candidates for the board.

A representative from Young Poong and MBK Partners remarked, "We will take every necessary measure to restore corporate governance, enhance shareholder value, and bolster the corporate worth of Korea Zinc through a fair and transparent general meeting."

This legal decision underscores the ongoing tensions and complex dynamics within corporate governance at Korea Zinc, a crucial player within the mining and metals sector. Young Poong and MBK Partners aim to revitalize the strategic direction and oversight of the company moving forward, especially in light of recent challenges.

Moreover, with the court's recent ruling, stakeholders are closely monitoring the strategic moves of both Young Poong and Korea Zinc in the forthcoming meetings. The implications of this case extend beyond the shareholders involved, reflecting broader themes of corporate rights, governance standards, and the safeguarding of shareholder interests in South Korea's corporate landscape.

Ultimately, the outcome of this ruling may set a precedent for how voting rights and shareholder governance are approached in future corporate dealings, not only for Korea Zinc but also for other firms in the industry.