Seoul: South Korea's financial regulator on Wednesday intervened in Korea Zinc Co.'s proposed rights issue, a strategic move intended to thwart a takeover attempt by its largest shareholder in collaboration with a private equity firm. The Financial Supervisory Service (FSS) has mandated Korea Zinc to submit a revised share sale plan within three months, citing potential risks to investor interests in the current proposal, according to a company spokesperson.According to Yonhap News Agency, Korea Zinc, the world's leading refined zinc smelter, had announced its intention to issue 3,732,650 new shares, representing approximately 18 percent of its outstanding shares, to raise 2.5 trillion won (US$1.8 billion). The shares were to be offered at about 670,000 won each, with subscriptions scheduled for December 3-4. The plan includes allocating 20 percent of the new shares for employee subscriptions on December 3, as part of its strategy to gain more treasury stocks with voting rights in its ongoing battle against Young Poong and MBK Partners.Currently, Young Poong holds a 38.47 percent stake in Korea Zinc after a tender offer, while Korea Zinc Chairman Choi Yun-beom and affiliates collectively own 35.4 percent following a buyback. The timing of the rights issue announcement, shortly after the buyback concluded on October 23, has sparked concerns about potential market manipulation.The regulator is reportedly investigating whether Korea Zinc intends to use the rights issue proceeds to repay loans taken for the buyback, which could be deemed unfair trading. This concern arises due to the discrepancy between the buyback price of 890,000 won per share and the rights issue price of 670,000 won, which may disadvantage existing shareholders who did not sell their shares during the buyback.On Wednesday, Korea Zinc's stock fell by 2.2 percent to 1,230,000 won, significantly underperforming the broader Korea Composite Stock Price Index, which saw a 0.5 percent decline.
- October 12, 2026
