Seoul: Korea Zinc Co. Chairman Choi Yun-beom on Thursday successfully blocked an attempt by Young Poong Corp. and MBK Partners to gain control of the board of directors, officials said, escalating a prolonged management dispute at the zinc smelter. At an extraordinary general shareholders' meeting in Seoul, the company approved a proposal to cap the total board size at 19 members with 73.2 percent of the votes cast in favor, according to the officials.
According to Yonhap News Agency, the 19-member board cap, proposed by Choi, was a strategic move to disrupt Young Poong-MBK's plan to nominate 14 candidates and secure a majority. The board is currently composed of 12 directors, 11 of whom are on Choi's side. With the new cap, the alliance will be limited to adding a maximum of seven directors.
The result came a day after Choi announced that it had limited Young Poong's voting rights of 25.4 percent through cross-shareholdings, effectively reducing the Young Poong-MBK alliance's combined voting stake from 40.97 percent to 15.55 percent. Choi's team controls a combined 34.35 percent stake in Korea Zinc.
Young Poong and MBK Partners strongly opposed the decision, stating they would take legal action against the cross-shareholdings. Meanwhile, shareholders also adopted cumulative voting, which enables shareholders to allocate all their votes to a single nominee when multiple board positions are open. However, this system will take effect at the next meeting due to a court ruling earlier this week.
A Seoul court on Tuesday upheld an injunction from the Young Poong-MBK alliance, blocking Choi's team from presenting the proposal at Thursday's meeting.