Court decision blocks Korea Zinc from implementing board voting system

Home > Business > Industry

print dictionary print

Court decision blocks Korea Zinc from implementing board voting system

Audio report: written by reporters, read by AI


Korea Zinc Chairman Choi Yun-beom speaks during a press conference held in central Seoul on Nov. 13. [NEWS1]

Korea Zinc Chairman Choi Yun-beom speaks during a press conference held in central Seoul on Nov. 13. [NEWS1]

 
The Seoul Central District Court approved an injunction filed by the MBK Partners-Young Poong coalition aimed at blocking Korea Zinc from implementing a voting system that could favorably aid Chairman Choi Yun-beom during a shareholder meeting scheduled for Jan. 23. 
 
The result is seen as putting a brake on Choi's intention to protect his management rights by securing a majority on the board at a time when he is losing the stake race against the MBK alliance.
 

Related Article

 
The cumulative voting system allows shareholders to cast all of their votes for a single board of directors nominee when the company has multiple openings, in contrast to a regular voting system that restricts shareholders from giving more than one vote to a single candidate.
 
The voting scheme is known to be advantageous to minority shareholders, as it allows voting for the preferred directors in a bid to hold the largest shareholder in check. It means that even with the MBK cohort's majority stake, it wouldn’t be able to secure a majority on the board of directors.
 
Under the “3 percent rule” of the Korean Commercial Act, shareholders with more than 3 percent of shares are limited in their voting power up to that percentage, seriously reining in Young Poong at 24.42 percent and MBK at 7.82 percent. Choi’s allies have smaller stakes, which means they aren't subject to the restriction from the law.
 
Choi and his allies reportedly possess up to 40 percent of the zinc smelter, while the MBK-Young Poong coalition outweighs them with some 46.7 percent.
 
MBK Partners immediately issued a statement about the court's decision, adding that it is an "obvious ruling," citing the lack of legality in the voting system. 
 
"The ruling signals the reform of Korea Zinc's governance structure, and the MBK Partners-Young Poong coalition will do our best to conduct the shareholder meeting fairly and rightfully," it said. 
 
 
 

BY SARAH CHEA [[email protected]]
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)