#South Korea #Seoul #Corporate Governance #Korea Zinc #minority rights

Korea Zinc Holds Extraordinary General Meeting

On January 23, 2025, Korea Zinc (KRX:010130) convened an extraordinary general meeting (EGM) at the Grand Hyatt Seoul, engaging shareholders to deliberate on eight crucial agenda items concerning the company's governance and operational structure. The outcome was pivotal, reflecting a positive trajectory for minority shareholders and corporate governance enhancements.

Key Resolutions Passed at the EGM

At the EGM, shareholders overwhelmingly approved six out of the eight proposed amendments to the company’s articles, showcasing a united front in favor of governance reforms aimed at bolstering minority shareholder interests. Notably, the introduction of a cumulative voting system was embraced with over 70% approval, facilitating greater representation for minority shareholders in the electoral process for board members. This transformative measure will enable shareholders to cast votes equal to the number of positions up for election, thereby amplifying their voices against dominant stakeholders.

Other approved resolutions included the capping of the board size to a maximum of 19 members, which aligns with recommendations from esteemed proxy advisory firms such as Glass Lewis and ISS. This limitation is projected to enhance board efficiency and stability. Additionally, shareholders welcomed the appointment of an independent director as chairperson of the board, further isolating board oversight from controlling shareholder influence and reinforcing governance independence.

Dividend Policy and Stock Split

The EGM also voted in favor of proposed changes to the company’s dividend distribution model. Transitioning to quarterly dividends will allow for more regular returns to shareholders, with distributions planned for March, June, and September. This shift reflects Korea Zinc's commitment to enhancing shareholder value.

A significant stock split was another highlight, reducing the par value per share from KRW 5,000 to KRW 500. This adjustment aims to increase liquidity and accessibility for minority investors, thereby broadening the investment landscape.

The Rejection of Proposals

While the meeting yielded several progressive outcomes, two key proposals faced rejection. Efforts to implement an executive officer system aimed at improving corporate governance, backed by MBK Partners and Young Poong, failed to meet the approval threshold due to opposition from the consortium, highlighting the complexities of stakeholder dynamics at play.

Moreover, a proposal to enhance protections for minority shareholders did not pass, further amplifying ongoing discussions about governance strategies within the company.

New Board Appointments and Shareholder Engagement

The EGM marked a significant change in board composition, with all seven independent director candidates meeting with success in their appointments. This group comprises prominent figures from various sectors, including academia and finance, reinforcing the board's expertise and independence.

In the backdrop of these developments, a considerable turnout of Korea Zinc’s labor union members showcased their collective desire to protect the company as a pivotal player in South Korea’s industrial landscape. The union’s organized presence at the EGM signaled a shared commitment to safeguarding national interests amid evolving corporate strategies.

In response to these changes, the management of Korea Zinc stated their openness to dialogue and cooperation, particularly with MBK Partners, to forge a collaborative path forward. Emphasizing the importance of mutual trust, the company aims to navigate potential challenges, including employment stability concerns and the risk of asset divestitures, while maximizing shareholder interests.

Future Outlook

As Korea Zinc moves forward post-EGM, management will conduct a press conference to review the outcomes and outline the strategic direction ahead. The combination of newly adopted governance practices, alongside shareholder and employee engagement, positions Korea Zinc favorably within the critical national industries it supports.

Through this EGM, Korea Zinc’s leadership has reiterated their commitment to upholding shareholder rights, enhancing transparency, and fostering an environment of trust and collaboration, crucial for navigating the complexities of the industrial sector in South Korea.