Korea Zinc and MBK Partners, along with Youngpoong, have clashed again over a court ruling regarding the restriction of Youngpoong's voting rights during an extraordinary shareholders meeting held in January 2026. Youngpoong claims the court recognized the illegal actions of Korea Zinc's management and their liability for damages, while Korea Zinc counters that the ruling only pertains to personal damages awarded to CEO Park Gi-deok and does not affect the current governance structure.
On July 10, the 17th Civil Division of the Seoul Central District Court, presided over by Judge Jang Ji-hye, ruled in favor of Youngpoong in a damages lawsuit against Park, ordering him to pay 100 million won plus delayed damages.
This lawsuit stems from Korea Zinc's actions during the January extraordinary shareholders meeting, where it allegedly formed a cross-shareholding relationship using its Australian subsidiary, Sunmetal Corporation (SMC), to restrict Youngpoong's voting rights.
Youngpoong explained that the court determined SMC could not be considered a company similar to a stock corporation under Korean law, thus not qualifying as a subsidiary. Consequently, the court recognized the act of restricting Youngpoong's voting rights based on the cross-shareholding with SMC as an illegal act.
The court also found that Park, as both CEO of Korea Zinc and a director of SMC, was directly involved in the formation of the cross-shareholding and the process of restricting voting rights, which was deemed an obstruction of the existing management's control.
MBK and Youngpoong stated, "This ruling confirms that the major shareholder's voting rights cannot be limited under the pretext of defending the existing management's control, and it clearly establishes that legal responsibility follows those who lead illegal actions."
In contrast, Korea Zinc argued that the ruling does not address the legality of hostile takeovers or the overall legality of management defense. Korea Zinc stated, "This ruling pertains specifically to the cross-shareholding related to the January extraordinary shareholders meeting and is a personal damages ruling against Park, who was the chair of that meeting."
Korea Zinc emphasized that the legality of the governance structure was affirmed by the Supreme Court in March 2026 regarding the cross-shareholding with its overseas subsidiary, Sunmetal Holdings (SMH), and the restriction of Youngpoong's voting rights. "Since the legality of the current governance structure has been recognized based on the March shareholders meeting resolution, this ruling has no impact on Korea Zinc," it added, urging a distinction between the January extraordinary shareholders meeting and the March regular shareholders meeting.
* This article has been translated by AI.
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