Korea Zinc has stated that the ruling in favor of the company in a shareholder representative lawsuit filed by Youngpoong, which sought approximately 837 billion won in damages, confirms the board's reasonable management decisions.
On October 22, the Seoul Central District Court's Civil Division 30, led by Judge Kim Seok-beom, ruled against Youngpoong in its lawsuit against Korea Zinc's Chairman Choi Yoon-beom and other directors. The court found that the board's decision to conduct a share buyback was not significantly unreasonable and did not violate the duty of care or loyalty.
Youngpoong has claimed since 2024 that Korea Zinc's share buyback was detrimental to the company as part of its defense against a management takeover. A request for a temporary injunction to halt the buyback was also dismissed by the court.
Korea Zinc expressed in a statement that the ruling clearly confirms the hostile M&A attempt driven by predatory capital. However, the company also voiced concerns that the repeated lawsuits from Youngpoong and MBK Partners could intimidate the board and management in their decision-making. They specifically noted that large damage claims against individual directors could burden management activities.
Furthermore, they argued that ongoing lawsuits and allegations during the management dispute could negatively impact the establishment of long-term strategies and normal business operations. They emphasized the need for institutional safeguards to protect the board's independent decision-making and corporate activities.
Korea Zinc plans to continue its existing projects, including strengthening its supply chain for key minerals and constructing a smelter in the United States, focusing on enhancing corporate and shareholder value.
On the same day, Youngpoong and MBK Partners announced their intention to appeal the ruling. Youngpoong stated in a press release that the illegal management actions that turned Korea Zinc into a personal vault for Chairman Choi Yoon-beom, while offloading massive debts, cannot be justified as the discretion of directors. They pledged to appeal immediately to restore the damaged shareholder value and rights.
* This article has been translated by AI.
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