Korea Zinc shares fall as rival faction secures court injunction
Korea Zinc Co. shares dropped on Tuesday after a Seoul court accepted an injunction filed by MBK Partners Ltd., which improves the chances of the private equity consortium to gain control of the company.
Shares in the world’s biggest zinc smelter fell 8.6% to close at the lowest since early October, after the court agreed with MBKP’s request to restrict Korea Zinc from implementing cumulative voting system at the extraordinary general meeting on Thursday.
The injunction paves the way for hostile bidders MBKP and Young Poong Corp., which jointly control about 41% of Korea Zinc, to push through more of their directors at the meeting. The two sides have been at loggerheads since mid-September after the alliance lobbed an unsolicited offer to gain control of the company. Korea Zinc chief executive officer Yun B. Choi rebuffed the offer and launched a share buyback after teaming up with private equity firm Bain Capital, giving his camp about 35% support of shareholders.
Thursday’s special meeting will decide which side prevails in the four-month long battle.
Global proxy firm Institutional Shareholder Services Inc. has advised shareholders to vote against the cumulative voting system, saying it is seen as a tool for Choi to protect his management control. Unlike simple voting, where shareholders can cast only one vote per board seat, cumulative voting allows them to pool all their votes for a single candidate or distribute them as they choose, giving minority shareholders more power.
At the meeting Thursday, shareholders will be able to vote whether to adopt the cumulative voting, but the injunction will prevent the company from using the new system immediately even if they vote in favor.
The MBKP-Young Poong alliance has proposed adding 14 new directors to the current 12-member board, while Korea Zinc nominated seven additional directors to maintain its control of the board.
The court’s decision signals the start of better governance at Korea Zinc, MBKP said in a statement Tuesday. The metal producer said it will continue to push for cumulative voting system to improve rights of minority shareholders.
Source: Bloomberg
Thursday ۲۳rd of January ۲۰۲۵ 32
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