[비즈한국] At the Korea Zinc010130 regular general shareholders' meeting on March 24, the decision on 'how many directors to appoint' will be made before electing the new director candidates. According to the notice for the general meeting, both a 'proposal to appoint 5 directors' and a 'proposal to appoint 6 directors' are on the agenda as Item 3-1. The 5-member proposal was submitted by Yumi Development, while the 6-member proposal was submitted by YPC, Young Poong000670, and Korea Corporate Investment Holdings as shareholder proposals. If both proposals meet the requirements for an ordinary resolution, the one with more votes will be passed.
The candidate pool for both the 5-member and 6-member proposals is the same. The candidates recommended by the company are executive director candidate Choi Yun-beom and outside director candidate Hwang Deok-nam, while Walter Field McLallen was recommended by Crucible JV LLC. Additionally, candidates Park Byeong-uk, Choi Yeon-seok, Oh Young, Choi Byeong-il, and Lee Seon-sook were recommended by YPC, Young Poong, and Korea Corporate Investment Holdings. If the amendment to the articles of incorporation for the expansion of separate election audit committee members (Item 2-8) is passed, a separate agenda item for appointing outside directors who will serve as audit committee members (Item 5) will also be presented. The notice specifies that in this case, the number of directors could become 18 or 19.
The reason Korea Zinc supports the 5-member appointment proposal lies in its response to the revised Commercial Act. According to company explanatory materials and shareholder letters, as a large-scale listed company, Korea Zinc must have at least two separately elected audit committee members by September 10, 2026. Therefore, the company deems it reasonable to appoint 5 directors at this regular general meeting and leave the remaining 1 seat vacant until the timing for the separate election of audit committee members. The company explained that appointing all 6 members now could necessitate another extraordinary general meeting before the law takes effect, leading to unnecessary costs and administrative burdens. Practical interpretations regarding the revised Commercial Act also suggest that target companies need to prepare for article revisions and additional appointment procedures ahead of the expansion to two separately elected audit committee members and the implementation of the strengthened 3% rule.
The reason the Young Poong-MBK coalition insists on the 6-member proposal is tied to their calculation to maximize the number of board seats they can secure at this general meeting. Six directors' terms are expiring at this meeting, and the Young Poong-MBK side maintains the position that all 6 seats must be filled now. While there is a justification for operating without vacancies rather than reducing the board size, under the cumulative voting system, the more positions available for election, the wider the opportunity for the opposing side to enter the board. Market analysis suggests that while the theoretical shareholding required to secure one director seat is about 14.3% when 6 are being appointed, it rises to about 16.7% when only 5 are appointed, giving the 5-member proposal the effect of relatively raising the barrier to entry.
The fact that Korea Zinc presented only 3 candidates friendly to the company instead of 5 should be interpreted in the same context. The company’s explanatory materials state that there are a total of 3 candidates proposed by Korea Zinc and Crucible JV. In a shareholder letter, Korea Zinc described Crucible JV as a strategic partner and minority shareholder co-promoting an integrated U.S. smelter project, and stated that this shareholder nominated candidate McLallen as a new director. In other words, while McLallen is not a candidate directly recommended by the company, he is included in the group supported by Korea Zinc under this agenda structure.
The background of limiting the number of candidates to 3 also reflects the characteristics of the cumulative voting system. Because the cumulative voting system allows shareholders to concentrate votes equal to the number of shares held multiplied by the number of directors to be elected on specific candidates, the fewer candidates recommended by a single faction, the more heavily votes can be concentrated on individual candidates. Edaily Marketin analyzed that Chairman Choi Yun-beom's side chose a strategy of concentrating votes on the 3 candidates—Choi Yun-beom, Hwang Deok-nam, and McLallen—while the Young Poong-MBK side is using 5 candidates to broaden their path into the board.
Opinions from external proxy advisory firms have also emerged. The Korea ESG Institute recommended support for the current management in a report released on the 9th, assessing that Korea Zinc's proposal to appoint 5 directors better aligns with the purpose of the revised Commercial Act. The institute explained that Korea Zinc presented a plan to appoint 5 directors first at this general meeting and fill the remaining 1 seat in accordance with the separate audit committee member election procedure.
The core of this Korea Zinc regular general shareholders' meeting is not just whether individual candidates are elected. The calculation of cumulative votes will change depending on whether the 5-member or 6-member proposal passes, and the company's approach to composing its audit committee before the revised Commercial Act takes effect in September will also change. The background behind Korea Zinc choosing 'reserving 1 seat' and Young Poong-MBK choosing 'filling all 6 seats'—despite both facing 6 expiring terms—is intertwined with conflicting interests regarding responses to separate audit committee member elections and the expansion of board access.