[Alpha Biz= Reporter Kim Jisun] A heated dispute has erupted between MBK Partners and Korea Zinc over allegations of breaching a Non-Disclosure Agreement (NDA).
According to the investment banking (IB) industry on the 8th, the core of the controversy lies in whether MBK violated the NDA it signed with Korea Zinc in May 2022 while receiving information related to new business ventures.
The NDA included about 20 clauses, such as prohibiting the use of received information for other purposes and refraining from actions that could affect Korea Zinc’s management rights. The confidentiality obligations expired in May this year.
However, just three months after the NDA's expiration, MBK signed a management cooperation agreement with Youngpoong on September 12 and launched a tender offer for Korea Zinc’s shares.
Korea Zinc suspects that MBK used information obtained during the NDA period to prepare for the tender offer and management control, arguing that it would have been practically impossible to plan a multi-trillion-won acquisition within three months after the NDA expired.
In response to the allegations, MBK issued a statement on the 3rd, asserting that its "Buyout" division, which acquires corporate management rights, operates separately from its "Special Situations" division, which handles minority investments and private bond investments. MBK emphasized the existence of a "Chinese wall" between the two divisions, preventing any internal exchange of confidential information.
MBK claims there is no connection between the NDA signed in 2022 and its current tender offer for Korea Zinc.
However, the IB industry remains skeptical, noting that private equity funds (PEFs) often lack transparency in governance, decision-making authorities, and processes. This raises doubts about whether the "Chinese wall" within MBK is genuinely effective.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
