[비즈한국] At the Korea Zinc010130 regular general shareholders' meeting, Chairman Choi Yun-beom successfully defended his position as an executive director, securing his management control. However, with candidates from the Young Poong000670-MBK coalition also entering the board, an 'uncomfortable cohabitation' within the board of directors regarding future management rights is expected to begin in earnest. As a result of this election, the Korea Zinc board has been reorganized from the previous 11-to-4 (Chairman Choi’s side) to a 9-to-5 system.
The 52nd Korea Zinc regular general shareholders' meeting was held on March 24 at the Koreana Hotel in Jongno-gu, Seoul. Once again this year, the meeting saw a war of nerves between the two sides even before it began due to issues with duplicate proxies. As a result of the proxy verification process, the meeting, which was scheduled to start at 9:00 AM, was delayed by approximately three hours and opened around 12:00 PM.
The key battleground of this shareholders' meeting was the third agenda item: the appointment of directors. Regarding the six director positions whose terms were expiring, both sides engaged in a fierce strategic battle over the number of directors to be appointed. Yumi Development, categorized as belonging to Chairman Choi Yun-beom's side, proposed electing only 5 directors, while the Young Poong-MBK side insisted that all 6 should be appointed at once.
Yumi Development proposed the election of 5 directors, citing the need to prepare for uncertainties regarding the appointment of separated audit committee members. Following the amendment of the Commercial Act, at least two audit committee members must be elected separately. If the motion for 6 directors were passed while no audit committee member was appointed at this meeting, it could have led to a complicated situation requiring an existing director to resign mid-term.
As a result of the vote, the motion to appoint 5 directors was passed, raising the threshold for director election under the cumulative voting system. This made it difficult for the Young Poong-MBK side, which owns approximately 41.1% of the shares, to securely obtain 3 seats, favoring the Korea Zinc side, which had nominated only 2 directors. The number of directors to be appointed has a direct impact on the number of seats each faction can secure under cumulative voting. The cumulative voting system grants as many voting rights per share as there are directors to be elected and allows these votes to be concentrated on specific candidates, making it easier for minority shareholders to elect supported candidates.
In the subsequent director election vote, conflict arose over the application of voting methods for foreign shareholders. Korea Zinc stated that to resolve the under-voting problem caused by foreign shareholders' local voting systems not reflecting the cumulative voting system, it would apply votes in proportion to the total number of shares held by those shareholders. Korea Zinc explained, "Because there is an under-voting problem where fewer votes are cast than the number of shares held, this method is an inevitable measure to reflect the shareholders' will as much as possible."
However, the Young Poong-MBK side and some shareholders protested, claiming that the proportional application method was an arbitrary manipulation of the voting results. Furthermore, as the company decided not to disclose the preliminary electronic voting results received through the Korea Securities Depository before the vote, shouting and protests from some shareholders continued even while the voting was in progress.
As a result of the subsequent director election, 3 candidates from Chairman Choi Yun-beom's friendly side and 2 from the Young Poong-MBK side were elected. From the Korea Zinc side, Chairman Choi Yun-beom was elected as an executive director and candidate Hwang Deok-nam was elected as an outside director. Additionally, Walter Field MacLarren, a non-executive director candidate recommended by the Crucible JV (a joint venture with the U.S. government), and Young Poong-MBK-aligned candidates Choi Yeon-seok (non-executive director) and Lee Seon-sook (outside director) were elected. Korea Zinc stated that even without applying the proportionality for foreign shareholders, the election results would not have changed.
Although Chairman Choi Yun-beom's side maintained a majority on the board with this appointment, the increased share of the Young Poong-MBK side is expected to further intensify conflicts and checks during future management decision-making processes.
Meanwhile, in front of the Koreana Hotel where the shareholders' meeting was held, the Korea Zinc Labor Union of the Federation of Korean Metalworkers' Trade Unions held a rally to denounce Young Poong and MBK. The Korea Zinc union pointed to the restructuring that followed MBK's acquisition of Homeplus and the management failures of Young Poong, and is demanding that MBK stop its hostile M&A of Korea Zinc and that Young Poong cease its interference in management.