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Photo = Yonhap news |
[Alpha Biz= Paul Lee] Korea Corporate Investment Holdings, an investment vehicle established by MBK Partners for the purpose of investing in Korea Zinc, announced on the 12th that it has filed a shareholder derivative lawsuit (seeking damages) against Chairman Choi Yoon-beom and CEO Park Ki-deok of Korea Zinc.
The lawsuit claims that Chairman Choi and CEO Park caused damage to the company by selling 5.436 million shares (7.25% of the total shares) of Hanwha Corporation, which Korea Zinc held, at a low price without a resolution from the board of directors in November of last year.
Korea Corporate Investment Holdings stated, “About a month ago, we demanded that the audit committee of Korea Zinc thoroughly investigate the circumstances surrounding the low-priced sale of Hanwha shares and seek compensation from those responsible for the damages, including Chairman Choi.” They added, “However, despite our legitimate request, no action has been taken by the company for more than a month, prompting the major shareholder to take action.”
The holding company filed a lawsuit at the Seoul Central District Court on the same day, asserting, “Chairman Choi and CEO Park unilaterally disposed of the Hanwha shares, which should have been sold at a premium, causing significant financial damage not only to Korea Zinc but also to its shareholders.” They continued, “Chairman Choi made this decision against the interests of all shareholders, likely to secure the support of Hanwha affiliates, as he was facing a threat to his management rights at the time.”
The amount of damages being claimed is at least 19.6 billion KRW, but the holding company expects that if the shares had not been disposed of and had been retained, the damage could exceed 100 billion KRW, considering the loss in expected value. The current share price of Hanwha Corporation is more than 80% higher than it was at the time of the sale.
A representative of Korea Corporate Investment Holdings stated, “Had Korea Zinc held on to the Hanwha shares just as Hanwha Corporation has kept its stake in Korea Zinc, the company would have seen a capital gain of 130.7 billion KRW as of the 9th. However, due to Chairman Choi’s hasty sale during the restriction period, the company suffered damage.” They added, “We intend to first claim the difference based on the premium rate of 12.92%, which Hanwha Energy applied during Hanwha Corporation’s public tender offer, for the shares sold at 27,950 KRW per share.”
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
