Court Voids Korea Zinc Shareholder Meeting Over Restricted Voting Rights
A first-instance ruling by a court has ordered the revocation of a resolution of a general meeting of shareholders of Korea Zinc, which was passed while restricting the voting rights of Young Poong, the largest shareholder. With this ruling, the legitimacy of the governance structure established by
A Seoul Central District Court ruling has invalidated a Korea Zinc shareholder resolution passed in March 2025, which restricted voting rights for the company's largest shareholder, Young Poong. The court's decision overturns the resolution, including any changes made to the articles of incorporation, appointments of directors, and members of the audit committee.
The ruling underscores that "existing shareholders’ voting rights cannot be restricted by applying cross-shareholding to defend management rights." Young Poong and MBK Partners expressed their dissatisfaction, calling the court's decision a "strict confirmation" that the actions of Chairman Choi Yun-beom and the management of Korea Zinc were unjustified.
The plaintiffs also alleged that nearly 57 billion won (approximately $42.8 million) of funds, intended for the company's investments and core business, were misused to defend management rights illegally. This ruling echoes a series of legal judgments since early last year, with the Supreme Court previously deeming the voting rights restriction during an extraordinary general meeting in January 2025 as illegal.
The case has raised questions about the legitimacy of Korea Zinc's governance structure, formed on the basis of these illegal voting rights restrictions. As a result, Chairman Choi and his associates may face the prospect of reconstituting the board of directors soon. The Young Poong and MBK Partners side has called for an apology from management and a transparent governance structure.
Meanwhile, Korea Zinc plans to appeal the ruling to a higher court, asserting the ruling contradicts Supreme Court precedents and January 2025's injunction case judgment.
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