2024-12-26
(Korea JoongAng Daily, Dec. 26, 2024)
Ahead of Korea Zinc’s shareholder meeting set for next month, the company drew an ace from its sleeve with the implementation of a voting system favorable to minority shareholders that can possibly aid Chairman Choi Yun-beom in the ongoing brutal management conflict with the MBK Partners-Young Poong coalition.
Korea Zinc on Monday put a “cumulative voting” system on the shareholder meeting agenda scheduled for Jan. 23, a move likely to protect Choi’s management rights as he is losing in the stake race against the MBK alliance.
Choi showed his confidence through a message to Korea Zinc employees on Dec. 20, saying that he “is fully prepared by predicting the opponent’s movements in advance,” and he will “surely head off the hostile merger and secure victory.”
Choi and his allies reportedly possess up to 40 percent of the world’s largest zinc smelter, while the MBK-Young Poong coalition outstrips them with some 46.7 percent.
The chairman is pushing for cumulative voting, which allows shareholders to cast all of their votes for a single nominee for the board of directors when the company has multiple openings, in contrast to a regular voting system that restricts shareholders from giving more than one vote to a single candidate.
The voting scheme is known to be advantageous to minority shareholders as a means of voting for their preferred directors in a bid to hold the largest shareholder in check, which means that even with the MBK team’s majority stake, it won’t be able to secure a majority in the board of directors.
Under the “3 percent rule” of the Korean Commercial Act, shareholders with more than 3 percent of shares are limited to voting power up to that percentage, seriously reining in Young Poong at 24.42 percent and MBK at 7.82 percent.
