[비즈한국] The Korea Zinc010130 Minority Shareholders' Solidarity has filed a criminal complaint with the prosecution against Korea Zinc Chairman Choi Yun-beom and all members of the board of directors. The action stems from the 'preliminary candidate recommendation system for outside directors serving on the audit committee,' which Korea Zinc announced ahead of the extraordinary general meeting of shareholders in September, as it effectively blocks the participation of regular minority shareholders.
On the 11th, the Korea Zinc Minority Shareholders' Solidarity announced that they had filed a complaint with the Seoul Central District Prosecutors' Office, accusing Chairman Choi and all board members of charges including professional malpractice and obstruction of rights. The decision was made based on the judgment that Korea Zinc's preliminary candidate recommendation system for outside directors was designed to entrench a governance structure centered on specific major shareholders and management.
The issue raised by the minority shareholders is the eligibility requirements for shareholders to recommend preliminary candidates for outside directors. In its recent announcement, Korea Zinc limited the recommendation eligibility to △shareholders who have held at least 0.1% of the total issued shares for more than 6 months, or △shareholders who hold at least 1% of the total issued shares. It also added a clause stating, "One shareholder may recommend one candidate."
The minority shareholders' group pointed out that while these criteria may appear to have a lower barrier than the shareholder proposal rights under the Commercial Act in form, they are, in reality, at a level that is difficult for general investors to meet. The solidarity calculated that 0.1% of the total issued shares is equivalent to a single investor holding approximately 30 billion won worth of stock, based on Korea Zinc's closing price at the end of last November.
The core issue is whether minority shareholders can pool their shares. The solidarity argued that Korea Zinc's recent announcement effectively excludes the aggregation of shares, making it difficult for a large number of ordinary shareholders to obtain recommendation rights even if they unite. They argue that the minority shareholder rights system is intended to allow multiple shareholders to pool their stakes to keep management and major shareholders in check, but these new criteria neutralize that purpose.
The minority shareholders' group criticized the move, stating, "Making it impossible for thousands of shareholders who each hold 0.001% to exercise the same rights as an investor who holds 0.1% individually undermines the principle of shareholder equality," adding that it is "an institutional device designed to exclude the voices of minority shareholders."
They further stated, "The outside director system exists to monitor management and ensure the transparency of the company," and warned that "nevertheless, the management's creation of criteria that effectively blocks the possibility of minority shareholders recommending candidates could result in weakening the independent oversight function."