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Photo courtesy of Korea Zinc |
[Alpha Biz= Kim Jisun] The Korea Fair Trade Commission (KFTC) has launched an on-site investigation into the headquarters of Korea Zinc, focusing on allegations that Chairman Choi Yoon-beom used overseas affiliates to create a circular shareholding structure in a bid to defend his managerial control.
According to industry sources and regulatory officials on May 26, KFTC investigators were dispatched to Korea Zinc’s main office to collect related documents. The probe comes four months after MBK Partners and the Youngpoong alliance filed a complaint against Chairman Choi in late January, accusing him of violating the Fair Trade Act.
The KFTC is reportedly examining whether Chairman Choi’s actions constituted an unlawful defense of management rights through the use of overseas affiliates. Particular attention is being paid to the transfer of a 10.3% stake in Youngpoong to Sun Metals Corporation (SMC), a foreign sub-subsidiary based in Australia, on the eve of an extraordinary shareholders’ meeting. Authorities are investigating whether this maneuver created a new circular shareholding structure, which is prohibited under the current Fair Trade Act.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
