(Bloomberg) -- Korea Zinc Co. shareholders will vote next month on a new slate of directors proposed by shareholders trying to oust Chairman Yun B. Choi and his management team.
The company’s extraordinary general meeting is set for Jan. 23, it said in a statement on Tuesday, a gathering that will bring to a head a battle between its two largest blocks of investors, jostling for control of the world’s biggest zinc refiner.
Shareholders will have to decide whether or not to back 14 new board members recommended by Young Poong Corp, the largest shareholder, and private equity firm MBK Partners Ltd, who jointly own just shy of 40% of the company and have criticized its corporate governance under the current leadership. The other side, led by Choi and backed by buyout firm Bain Capital, hold more than 35%.
That puts the fate of the company’s future in the hands of independent and retail shareholders and the National Pension Service, the country’s biggest pension fund, which has a 7.6% stake in Korea Zinc. NPS hasn’t publicly disclosed its position on the proxy fight.
Shares in the smelter rose as much as 16% in Seoul to a record high, before trimming the gain to 9.3% at Tuesday’s close. Young Poong gained 3.3%.
The acrimonious fight over Korea Zinc has played out in public since MBKP and Young Poong made their unsolicited bid in mid-September. The consortium has accused Choi and the board of ignoring the interests of shareholders, including by piling on too much debt, and have questioned some recent investment decisions.
Korea Zinc has dismissed the accusations and described the private equity-led bid as “predatory M&A.” But Choi suffered a setback last month after the company withdrew a $1.8 billion share sale, bowing to regulatory pressure. He also agreed to step down as chair of the company’s board, though he will stay on as chief executive.
Fights over succession and corporate direction are not unusual in South Korea, where a handful of family-owned conglomerates, also known as chaebol, hold considerable sway over the country’s $2 trillion economy. But few involve private equity, or the twists and turns of Korea Zinc, a company vital to global efforts to diversify the supply of energy-transition metals beyond China.
--With assistance from Shinhye Kang.
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