Korea Zinc “immediately appeals” the loss in the first trial over the cancellation of the general shareholders’ meeting… Youngpoong is welcome

(Seoul = Yonhap News) Reporter Jeong Hoe-in and Jang Bo-in = Korea Zinc announced its intention to immediately appeal in protest against the court's first-instance ruling that the resolution made at the regular general shareholders' meeting in March last year that restricted the voting rights of Youngpoong and MBK Partners should be cancelled.

On the other hand, Youngpoong and MBK welcomed the court's confirmation that the act of arbitrarily depriving voting rights cannot be justified.

Korea Zinc issued a statement on the 12th and said, "We plan to immediately appeal the first trial judgment in the suit to cancel the resolution of the general shareholders' meeting. The court's judgment runs counter to the existing Supreme Court precedent as well as the Supreme Court's judgment on the provisional injunction case for exercising voting rights in this case, and a higher-level review and judgment on related legal principles is necessary."

Previously, the Seoul Central District Court's Civil Agreement Division 29 (Chief Judge Ko Seung-il) ruled in favor of the plaintiff in the lawsuit filed by Youngpoong and MBK against Korea Zinc, demanding "cancel the resolution of the general shareholders' meeting."

The court explained, “(Korea Zinc) judged that it could not restrict the voting rights of existing shareholders by applying provisions related to mutual stock to defend management rights.”

Youngpoong and MBK, the largest shareholders of Korea Zinc, have been fighting with Korea Zinc Chairman Choi Yoon-beom for control of the company since September 2024.

Last year, Chairman Choi formed a mutual stock relationship by allocating the shares of Youngpoong held by Sun Metal Corporation (SMC), a subsidiary of Korea Zinc, to Sun Metal Holdings (SMH), an Australian subsidiary and a corporation, thereby restricting the exercise of Youngpoong's voting rights at the shareholders' meeting.

Accordingly, Youngpoong and MBK Union filed an application for a provisional injunction to exercise voting rights and filed a lawsuit on the merits to cancel the resolution of the shareholders' meeting in May of last year.

The application for provisional injunction was finally dismissed by the Supreme Court in April of this year.

Korea Zinc emphasized that in the provisional injunction case, the Supreme Court recognized the legality of voting rights restrictions.

At the same time, he argued, “The applicability of provisions related to mutual stock is a matter that must be applied objectively and uniformly, taking into account relevant laws, existing Supreme Court precedents, and specific facts, and is not something that must be judged in consideration of subjective intentions, etc.”

On the other hand, Youngpoong and MBK argued in their statement, "The court confirmed the principle that the voting rights of existing shareholders cannot be restricted by applying mutual stock to defend management rights," and added, "With this ruling, the resolution to change the articles of incorporation and appoint directors and audit committee members that restricted Youngpoong's voting rights at the shareholders' meeting in March last year was cancelled."

Youngpoong and MBK said, “There is a fundamental problem with the legitimacy of the current governance structure, which is based on the illegal deprivation of voting rights,” and “We will continue to take necessary measures to ensure that Korea Zinc’s shareholder rights are fully guaranteed and a transparent and responsible governance structure is established.”