[비즈한국] The aftershocks of the management dispute between Korea Zinc, Young Poong, and MBK Partners continue to ripple. With the tax authorities now conducting an investigation following the financial regulator's accounting review, the contentious issues surrounding investments and capital expenditures that both sides have been debating have resurfaced. Korea Zinc views this tax audit as a routine procedure that coincides with the scheduled timing for a regular audit.
According to industry sources, the Seoul Regional Tax Office sent personnel from the 4th Bureau of Investigation to Korea Zinc's headquarters in Jongno-gu, Seoul, on the 6th to secure accounting books and tax-related materials. The 4th Bureau is known for being deployed for non-regular investigations or specific allegations such as tax evasion, slush funds, and embezzlement, rather than for general, routine tax audits. While Korea Zinc stated that this is a routine investigation conducted five years after the previous one in 2021, market interpretations regarding the nature of the investigation remain divided.
This tax audit comes amid ongoing accounting and investment controversies surrounding Korea Zinc. The Financial Supervisory Service initiated an accounting review of Korea Zinc and Young Poong in October 2024. In the market, issues such as the timely reflection of investment losses in the One Asia Partners fund and the appropriateness of accounting treatment regarding the acquisition of Igneo Holdings have been raised. Although this matter was escalated to an accounting audit in November of the same year, no conclusion regarding sanctions has been reached yet.
One of the focal points is the investment in One Asia Partners. Young Poong has raised suspicions that Korea Zinc made large-scale capital contributions to private equity funds managed by One Asia Partners, and that personal ties between Korea Zinc Chairman Choi Yun-beom and figures at One Asia Partners may have played a role. Young Poong claims that the investment in One Asia Partners resulted in a loss of approximately 51.1 billion won for Korea Zinc.
Young Poong has also recently re-raised the issue of the acquisition of Cheongho Comnet private bonds. Young Poong claims that in February 2019, Korea Zinc acquired 7 billion won worth of private bonds from Cheongho Comnet, owned by One Asia Partners CEO Ji Chang-bae, and that the principal and interest of these bonds were later repaid using funds from the One Asia Partners fund, which was effectively funded solely by Korea Zinc. Young Poong maintains that based on these capital flows, the related decision-making process must be thoroughly investigated.
Korea Zinc categorically denies these allegations. Korea Zinc maintains that investing a portion of its holdings in financial products such as bonds and funds is a standard asset management method, and that all investments and capital contributions were conducted legally in accordance with relevant laws and internal procedures. Furthermore, they are rebutting the claims, characterizing them as one-sided arguments raised by Young Poong and MBK Partners during the course of the management dispute.