'One-sided claims and public relations war'

Young Poong adviser faces reinvestigation over pollution allegations

MBK chairman Kim Byung-ju under fire over Homeplus crisis

'Concerns over corporate value destruction grow'

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

Korea Zinc has urged MBK Partners and Young Poong to address their own legal and managerial liabilities before continuing to raise allegations against Chairman Choi Yun-beom's investment activities. The company went on the offensive, citing a police reinvestigation into Young Poong adviser Jang Hyung-jin over environmental pollution allegations and mounting criticism of MBK Chairman Kim Byung-ju over the Homeplus crisis.

In a statement released Tuesday, Korea Zinc said MBK Partners and Young Poong were "continuing a one-sided public relations campaign against Korea Zinc with provocative language, while ignoring the serious controversies and accountability issues they themselves face."

The statement came in response to MBK and Young Poong's renewed claims that Korea Zinc's fund investments were linked to personal investments made by Chairman Choi.

MBK and Young Poong had alleged that a One Asia Partners fund backed by Korea Zinc made follow-on investments totaling 79 billion won ($58.9 million) in four unlisted entertainment companies in which Choi and his family had invested first. They also alleged that three separate transactions totaling 36.35 billion won were made using Korea Zinc funds to companies connected to Ji Chang-bae — described as a close associate of Choi — and that those funds were later repaid through fund investments. MBK and Young Poong called on Choi to personally explain the transactions.

Korea Zinc reiterated its position that MBK and Young Poong were arbitrarily linking investment transactions carried out by separate legal entities in order to amplify allegations. The company said the structure and nature of the transactions had already been explained, and that the two parties were simply repeating similar claims without presenting new objective evidence.

Korea Zinc had also pushed back Monday, arguing that accountability for fund contributions and individual investment transactions must be treated separately. The company maintained that investment target selection and capital deployment fall within the fund manager's discretion, and that Choi's equity valuation and actual realized investment returns must also be distinguished.

In its latest statement, Korea Zinc shifted focus to the accountability issues facing its opponents.

The company first raised allegations of heavy metal contamination of the Nakdong River linked to Young Poong's Seokpo smelter. Korea Zinc argued it was inappropriate for Young Poong to question another company's business activities while its own adviser, Jang, is the subject of a police reinvestigation.

The Seoul Metropolitan Police Agency Metropolitan Investigation Unit on Monday summoned members of a residents' committee that had filed a complaint against Jang in connection with the alleged heavy metal contamination of the Nakdong River by the Seokpo smelter. Police had initially dismissed the case last year, but the Seoul Metropolitan Police Agency's investigation review committee decided in August to reopen it, and the probe is now under way.

"If Young Poong genuinely values corporate responsibility and governance, it should engage sincerely with the environmental investigation surrounding it and offer a responsible explanation, rather than focusing on raising allegations against other companies," Korea Zinc said.

On MBK, Korea Zinc took aim at the private equity fund's managerial responsibility for the Homeplus crisis. The company said that while workers, suppliers and other stakeholders were suffering through Homeplus's court receivership proceedings, MBK's leadership was focused on questioning the appropriateness of Korea Zinc's investments rather than responding to those hardships responsibly.

Korea Zinc also raised the issue of MBK Chairman Kim's absence from a National Assembly national audit. Kim did not appear before the audit on Oct. 7, and ahead of a comprehensive audit on Oct. 23, submitted a written explanation stating that he does not intervene in the management of individual portfolio companies.

Korea Zinc said the managerial responsibility surrounding the Homeplus crisis and the harm suffered by workers and suppliers had been a central issue at the National Assembly's national audit.

"We want to ask whether this is truly the responsible conduct expected of a private equity fund manager that has long emphasized long-term corporate growth and the protection of stakeholders," the company said.

The conflict between Korea Zinc and the MBK-Young Poong alliance has dragged on for more than two years since a tender offer-driven management control dispute began in September 2024. The two sides have continued legal battles and a public relations war over governance, shareholder value and the appropriateness of investments.

Korea Zinc warned that the ongoing dispute could weigh on the company's management and long-term investment plans. The company said it would respond firmly to any conduct that presents unverified allegations as established fact, given its obligation to protect the interests of the company and all its shareholders.

"Reasonable oversight and constructive criticism are necessary, but we will respond decisively to any conduct that treats unverified allegations as settled fact or uses them as a tool for a wasteful public relations war," Korea Zinc said.

Korea Zinc said the management control dispute must not be allowed to affect the company's long-term investment plans and growth strategy at a time when global competition for critical minerals is intensifying.

"This is a critical moment when global critical mineral supply chains are being rapidly restructured and competition among nations to secure critical minerals is growing ever fiercer," the company said.

Korea Zinc urged MBK and Young Poong to cooperate as major shareholders in supporting the company's sustainable growth and enhancing shareholder value, rather than continuing to repeat allegations against it.


kwater@heraldcorp.com