In the ongoing battle for control of Korea Zinc, the Young Poong–MBK Partners coalition has publicly appealed to major shareholders Hanwha (000880.KS) and LG Chem (051910.KS) for support. The coalition is urging the two South Korean companies to cast their votes for Park Yoo-kyung, former APG Asset Management head of responsible investment and governance for Asia-Pacific, who is standing as an outside director candidate to become a separately elected audit committee member at the extraordinary general shareholders’ meeting scheduled for September 9.
On the 28th, Young Poong and MBK sent shareholder letters to both companies, emphasizing that the essence of this audit committee appointment is not a contest for management control but rather the restoration of the audit committee’s independent oversight and check-and-balance function. The coalition’s argument is that since Hanwha and LG Chem have consistently stated they are not friendly shareholders of Korea Zinc Chairman Choi Yun-beom, supporting a candidate independent from management aligns with their previously stated positions.
The letter also cited various investigations and investment controversies surrounding Korea Zinc as grounds for requiring audit committee independence. These included accounting oversight measures by the Securities and Futures Commission, a special tax investigation by the National Tax Service, and Fair Trade Commission deliberations on cross-shareholding structures involving overseas affiliates.
In particular, the coalition again raised conflict-of-interest allegations over Korea Zinc funds that were subsequently invested through One Asia Partners into unlisted entertainment companies where Chairman Choi’s family had made prior investments. According to Young Poong and MBK, approximately 69 billion won (approximately $50.3 million) was deployed across three companies: Arc Media, High Hat, and Slingshot Studios. They claim a significant portion of these funds has yet to be recovered, and some of the investee companies have fallen into capital impairment.
Young Poong and MBK characterized this not as a simple investment failure but as a matter involving allegations of misappropriation of company funds and breach of fiduciary duty. They also criticized the current audit committee for failing to independently investigate the related fund flows and whether Chairman Choi’s side was involved.
Park was not directly nominated by Young Poong and MBK but was selected through public recommendations from Korea Zinc shareholders and corporate governance-related institutions and organizations, followed by screening by an external review committee. She spent approximately 10 years in equity research, handling financial statement analysis, corporate valuation, and modeling, and worked for about 17 years at APG, a global pension fund asset manager, evaluating corporate performance, capital allocation, financial policy, and governance.
Young Poong and MBK stated, “Candidate Park represents neither the largest shareholder bloc of Young Poong and MBK nor Director Choi Yun-beom’s side. Having worked from the perspective of a global institutional investor to protect corporate value and shareholder rights, she is a candidate capable of making independent judgments based on the long-term interests of Korea Zinc and all shareholders.”
Investment banking industry observers view this letter as effectively placing Hanwha and LG Chem on a public stage where they must make a choice. Separate election of audit committee members is subject to voting right restrictions, making the vote-counting method different from ordinary director appointments. As a result, the decisions of these two companies have emerged as key variables in this proxy contest.
An investment banking industry source noted, “This audit committee appointment is not just a vote on the individual candidate, but also a vote that reveals how much distance major shareholders intend to keep from current management. Depending on the choices made by Hanwha and LG Chem, the shareholder landscape in the Korea Zinc control dispute could be reinterpreted after the extraordinary general meeting.”