MBK, Young Poong-backed candidates Park Yu-kyung and Shim Hye-seop draw opposition recommendations; ISS, Glass Lewis and other major advisers also support Baek In-gyu
Korea Proxy Advisor has recommended shareholders vote in favor of Baek In-gyu, the audit committee candidate nominated by Korea Zinc's board of directors, at the company's extraordinary general meeting scheduled for Sept. 9. The advisory firm also recommended against Park Yu-kyung, the candidate put forward by MBK Partners and Young Poong, and opposed Shim Hye-seop, the MBK-Young Poong consortium's nominee among the four independent director candidates to be elected by cumulative voting.
Korea Proxy Advisor expressed its support for Baek in a proxy report published Wednesday, citing Article 542-11 of the Commercial Act, which requires that at least one audit committee member be an accounting or finance expert. The firm said the current absence of a certified public accountant or other accounting specialist on Korea Zinc's audit committee is a vulnerability — particularly given the accounting-related issues the company has recently faced — and that the appointment is needed to address that gap.
On that basis, Korea Proxy Advisor said it expects Baek, who holds CPA qualifications in both South Korea and the United States and spent 28 years as a partner at Deloitte Anjin accumulating experience in audit and financial advisory work, to strengthen the audit committee's functions.
The firm acknowledged Park's expertise and experience in responsible investment and corporate governance, but said that at this juncture, appointing a candidate with accounting expertise would be more appropriate for enhancing the audit committee's effectiveness. Korea Proxy Advisor also said that Park's previously stated public positions on key issues in the management control dispute — expressed through foreign media — could raise concerns about her ability to exercise objective judgment as an audit committee member.
On the agenda to elect four independent directors by cumulative voting, Korea Proxy Advisor recommended in favor of Lee Hyung-gyu and Seo Eun-suk, nominated by the company, and Lee Jun-bong, nominated by MBK and Young Poong, while opposing Shim. The firm cited a newspaper op-ed Shim wrote in December last year in which she criticized the rights offering structure tied to Korea Zinc's US smelter construction project, known as Project Crucible, from a perspective similar to that of the MBK-Young Poong camp.
Earlier, major domestic and international proxy advisory firms — including ISS, Glass Lewis, Sustinvest, PIRC and Egan-Jones Proxy Services — had all recommended in favor of Baek's appointment, commonly concluding that his expertise in accounting, auditing and internal controls is better suited to the core duties of an audit committee member.
"Major proxy advisory firms at home and abroad are expressing a shared view on the need to strengthen accounting expertise on the audit committee and the importance of management continuity," a Korea Zinc official said. "We will continue to strengthen the independence and expertise of the board and pursue our medium- to long-term growth strategies, including Project Crucible, without wavering, doing our utmost to enhance shareholder value."
Korea Zinc will hold its extraordinary general meeting at 10 a.m. on Sept. 9 at the Mondrian Hotel in Yongsan-gu, Seoul. The agenda items are an amendment to the articles of incorporation to expand separately elected audit committee members, the election of four directors by cumulative voting, and the appointment of an independent director to serve as an audit committee member.
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