The Seoul Central District Court rejected the plaintiffs' request to halt a third-party share allocation that would give the U.S. government-led joint venture a 10 percent stake in Korea Zinc. The ruling marks a pivotal victory for Chairman Choi Yun-birm, who has been locked in a bitter proxy fight with rival shareholders for over a year.
Under the investment plan approved by Korea Zinc's board on Dec. 15, the company will build a strategic minerals refinery in Clarksville, Tennessee, with construction slated to begin in 2027 and operations commencing in 2029. The facility will produce 13 metals, including 11 critical minerals, along with semiconductor-grade sulfuric acid.
The joint venture's largest shareholder will be the U.S. Department of War, holding a 40.1 percent stake. The Young Poong-MBK alliance had argued that Korea Zinc's decision to issue new shares rather than invest directly was designed to secure a "white knight" to defend Choi's leadership rather than raise capital.
If Korea Zinc proceeds with the share issuance on Dec. 26 as planned, the Choi camp's combined holdings, including stakes held by allies including Hanwha Group, LG Chem, and the National Pension Service, would reach about 45.5 percent of voting shares, overtaking the Young Poong-MBK bloc's 43.4 percent.
Young Poong and MBK expressed regret over the court's decision. "We cannot say that concerns over potential damage to existing shareholders' value, fairness of the investment contract, and long-term financial and managerial risks Korea Zinc will bear have been sufficiently addressed," the two said in a joint statement.
Korea Zinc welcomed the ruling. "We will carry out this project, which will drive Korea Zinc's future growth, without disruption and successfully enhance corporate and shareholder value," the company said.
Industry analysts note that U.S. government participation could classify Korea Zinc as an American security asset, potentially complicating any future takeover attempts by the Young Poong-MBK alliance.
reporter
Kim Dong-young
davekim0807@ajupress.com
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