Court Upholds Order to Disclose Yeongpoong-MBK Deal Papers in Korea Zinc Fight

MBK Partners and Yeongpoong remain locked in a legal dispute over whether contract documents tied to their bid to take control of Korea Zinc must be disclosed.
 
According to Yonhap News Agency on May 5, the Seoul High Court’s Civil Division 25-2 rejected an immediate appeal filed by Jang Hyeong-jin, an adviser at Yeongpoong, challenging a court order to submit documents related to a management cooperation agreement.
 
Korea Zinc, through its affiliate KZ Precision, had asked the court to order disclosure of contracts, including a call option agreement, that Yeongpoong and MBK Partners signed while pursuing what Korea Zinc describes as a hostile merger-and-acquisition attempt.
 
After a lower court granted the request in December, the appeals court also concluded that all contract documents between MBK Partners and Yeongpoong must be disclosed.
 
KZ Precision said the court recognized the request as a legitimate exercise of shareholder oversight and noted that Yeongpoong’s potential damages could vary depending on parts of the contracts that have not yet been publicly disclosed.
 
MBK Partners said it signed a shareholder agreement in September 2024 with Yeongpoong and members of Jang’s family to jointly exercise voting rights, and that it would be granted call options on some shares owned by Yeongpoong and related parties.
 
Korea Zinc has alleged that Yeongpoong entered into the call option deal to allow MBK to buy Yeongpoong’s Korea Zinc shares at a low price, raising suspicions including breach of trust. Korea Zinc has filed a shareholder derivative lawsuit seeking about 930 billion won against Jang and Yeongpoong directors.
 
Separately, Yeongpoong said an immediate appeal filed by KZ Precision in another case over a document submission order for a management cooperation agreement was also rejected on April 29, following a lower-court decision.
 
In that case, KZ Precision filed a lawsuit seeking to stop what it calls illegal conduct, arguing the management cooperation agreement amounts to breaches of Yeongpoong directors’ duties of care and loyalty and constitutes breach-of-trust conduct. It also sought a court order requiring submission of related contract documents during the proceedings.