Supreme Court rules Korea Zinc's SMC-based restriction of Young Poong's voting rights 'unlawful'

The Supreme Court ruled that Korea Zinc's attempt to restrict voting rights of its largest shareholder, Young Poong, was unlawful, a decision that may impact the fair trade watchdog's ongoing investigation of the smelter. In a Friday ruling, the Supreme Court upheld a lower court's conclusion that Sun Metals Corp., Korea Zinc's Australian affiliate, does not meet the criteria of a subsidiary under the Korean Commercial Act.

The court found no mistake in determining that SMC cannot be considered the same as, or most similar to, a stock company under Korean law. The disagreement revolves around Korea Zinc's use of SMC leading up to its extraordinary shareholders meeting in January 2025. Shortly before the meeting, SMC purchased around 10 percent of Young Poong's shares, allowing Korea Zinc to argue that their cross-shareholding relationship gave them the right to limit Young Poong's voting rights at the meeting.

The court's decision effectively nullified the legal justification for this action, Young Poong and MBK Partners stated. The alliance described the ruling as a significant victory.