[Alpha Biz= Kim Jisun] South Korea’s Supreme Court has finalized a key ruling in the management control dispute surrounding Korea Zinc, dismissing an appeal filed by MBK Partners and Young Poong over voting rights restrictions.

According to a regulatory filing by Korea Zinc on April 2, the Supreme Court rejected Young Poong’s re-appeal against a preliminary injunction seeking to allow the exercise of voting rights.

The court ruled that the lower court’s decision was valid and found no misinterpretation of legal principles regarding restrictions on voting rights tied to cross-shareholdings. It also determined that the structure of Korea Zinc’s subsidiary, Sun Metal Holdings (SMH), could not reasonably be excluded from being considered a subsidiary under commercial law, and that the application of Article 369(3) of the Korean Commercial Act was lawful.

As a result, the re-appeal was dismissed, and litigation costs were ordered to be borne by the creditor, Young Poong.

Previously, MBK Partners and Young Poong had filed for an injunction with the Seoul Central District Court in March of last year, arguing that the restriction of their voting rights at Korea Zinc’s annual general meeting was unjustified and requesting permission to exercise those rights.

The dispute originated when Korea Zinc restricted Young Poong’s voting rights through a circular shareholding structure. Chairman Choi Yun-beom’s side established a cross-shareholding loop after securing more than a 10% stake in Young Poong via Korea Zinc’s sub-subsidiary, Sun Metal Corporation (SMC).

However, in March last year, the court partially granted an injunction filed by the MBK–Young Poong alliance to suspend the effectiveness of certain resolutions at Korea Zinc’s extraordinary general meeting, ruling that the earlier restriction of Young Poong’s voting rights was unjustified.

In response, Chairman Choi’s side restructured the cross-shareholding arrangement by transferring shares to its Australian subsidiary, Sun Metal Holdings (SMH), thereby meeting the legal requirements for restricting voting rights under commercial law.

MBK and Young Poong subsequently filed another injunction, alleging that Chairman Choi’s side was attempting to disrupt the shareholders’ meeting. However, the courts ruled in favor of Korea Zinc through the first, appellate, and now Supreme Court decisions.

With the Supreme Court’s latest ruling, the dispute over voting rights at the annual general meeting is effectively concluded. The focus of the ongoing conflict is now expected to shift toward board composition and broader corporate governance restructuring.

 

 

 

[ⓒ 알파경제. 무단전재-재배포 금지]