Eight domestic and foreign proxy advisory firms

back Korea Zinc's board nominees

An aerial view of Korea Zinc's Onsan smelter [Korea Zinc]
An aerial view of Korea Zinc's Onsan smelter [Korea Zinc]

Major domestic and foreign proxy advisory firms have issued successive recommendations in favor of the director candidates put forward by Korea Zinc's management ahead of the company's extraordinary general meeting of shareholders, scheduled for Wednesday.

Korea ESG Ratings Institute, a domestic proxy adviser, said in a shareholder meeting analysis report released Tuesday that it recommends "supporting the current management to enhance corporate value through management stability." The firm also recommended voting in favor of all three management-nominated candidates: Baek In-gyu for audit committee member and Lee Hyung-gyu and Seo Eun-suk as independent director candidates.

On the key agenda item of electing an independent director to serve on the audit committee, eight of nine advisory firms expressed support for Baek, the candidate nominated by Korea Zinc's board.

Shareholders at the extraordinary meeting will vote on four independent director candidates and two independent director candidates to serve as audit committee members. Korea ESG Ratings Institute said the six director candidates "have no disqualifying grounds under the Commercial Act and possess the professional expertise the company requires," adding that "shareholder decision-making is needed in terms of what benefits corporate growth and shareholder value. We believe it is desirable to rally support for enhancing corporate value centered on the current management."

The firm further said that "the most important criteria for shareholders in deciding whether to grant management authority to the current management or to MBK Partners and Young Poong should be 'sustainable corporate growth,' 'long-term improvement of shareholder returns,' and 'superiority in innovation capabilities' that make these possible." It added that it holds "a positive view of the management performance, governance improvements and enhanced shareholder returns seen under the current management."

With Korea ESG Ratings Institute's recommendation, eight of the major proxy advisory firms that have issued reports on the extraordinary meeting — including ISS, Glass Lewis, Egan-Jones Proxy Services, PIRC, Sustinvest, ESG Research Institute and Korea Proxy Advisory — have now recommended voting for Baek. Seven of those firms recommended voting against the rival candidate, Park Yu-kyung.

In recommending Baek, the major advisory firms cited his expertise in accounting, auditing and internal controls — areas considered essential qualifications for an audit committee member.

Baek holds certified public accountant qualifications in both South Korea and the United States and built extensive experience in audit and financial advisory work during nearly 30 years as a partner at Deloitte Anjin.

Meanwhile, Korea Zinc said it plans to file criminal complaints against associates of Young Poong and MBK Partners ahead of the extraordinary shareholder meeting on Wednesday.

The company said materials distributed to shareholders by the Young Poong-MBK side contained false information regarding the disposal of treasury shares, accounting treatment and the resignation of independent directors. Korea Zinc said it is pursuing charges of defamation under the Act on Promotion of Information and Communications Network Utilization and Information Protection, defamation through publication, and obstruction of business.


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