Statement marks two years since tender offer; One Asia fund criticized
Ignio acquisition and debt surge cited in breach-of-duty claims
Board overhaul urged as Korea Zinc offers no official response
Youngpoong and private equity fund manager MBK Partners have publicly called for Korea Zinc Chairman Choi Yun-beom to step down from management, marking two years since the launch of their tender offer for the company's shares.
In a statement issued Monday, the two sides said "the issues raised two years ago have been confirmed as concrete facts through regulatory probes and sanctions, court rulings, and publicly disclosed materials," adding that "Choi Yun-beom's resignation from the board is the starting point for normalizing Korea Zinc's governance."
Youngpoong and MBK focused heavily on allegations that the Choi family had used company funds for personal gain and on investment losses. They said a total of 69 billion won ($51 million) from the One Asia Partners fund — financed with Korea Zinc money — was channeled into unlisted entertainment companies in which the Choi family had already invested personal funds. While the family stood to benefit from any rise in the value of those stakes, the companies in question, including Highhet and Slingshot, fell into complete capital impairment, inflicting heavy financial losses on Korea Zinc, they said.
The statement also cited the Financial Services Commission's decision to impose heavy penalties for failing to disclose related-party transactions and for violations of accounting standards. Youngpoong and MBK argued that "the substance of a breach-of-duty transaction — using company assets to pursue the private interests of an individual family and then passing the losses on to Korea Zinc and its shareholders — has been partially confirmed through action by a state authority." They added that the circumstances under which funds from the One Asia Havana No. 1 fund were used as transaction money in the case involving Kakao's alleged market manipulation of SM Entertainment shares must also be thoroughly investigated.
The alliance also took aim at Korea Zinc's roughly 580 billion won investment in Ignio Holdings, a US electronic-waste company that had been in operation for only a year, calling it a reckless acquisition. They said an astronomical sum of company money had been committed amid a rushed due-diligence process and a failure of board oversight, and urged that accountability for the decision be established.
The deterioration of Korea Zinc's financial position during its management defense was also cited as a key reason for demanding Choi's departure. Youngpoong and MBK said external borrowings on a consolidated basis jumped from about 800 billion won at end-2023 to about 7.5 trillion won as of end-June 2026, driven by roughly 2 trillion won in outside debt raised to fund a 1.8 trillion won share buyback tender offer. Over the same period, cash and cash equivalents shrank from about 2 trillion won to about 1.6 trillion won, they said, arguing that Korea Zinc had been transformed into a company burdened with excessive debt.
"Chairman Choi is nothing more than a management agent entrusted with running the company by its shareholders," they said. "As the responsible largest shareholder, we will get to the bottom of the unlawful and improper conduct and establish the independence and transparency of the board."
The management control dispute between Youngpoong and MBK Partners on one side and Korea Zinc on the other was triggered by the breakdown of the "partnership spirit" between the late founders Jang Byung-hee and Choi Ki-ho, which had endured for 75 years. It escalated in earnest when MBK Partners, acting in concert with Youngpoong, launched a tender offer for Korea Zinc shares in September 2024.
The Youngpoong-MBK alliance has been pressing for board control and governance reform, citing Choi's investment in the One Asia Partners fund, what it calls an overpriced acquisition of Ignio Holdings, damage to financial soundness from excessive borrowing for the share buyback, and allegations of self-dealing.
Choi's camp, for its part, has characterized the campaign as a hostile and predatory takeover bid by a speculative private equity fund targeting Korea Zinc's core national industries and its future growth strategy known as "Troika Drive." The company has fought back through large-scale share buybacks and the securing of allied shareholders, and the two sides remain locked in a prolonged battle over ownership and legal disputes.
silverpaper@heraldcorp.com
