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Photo = Korea Zinc |
[Alpha Biz= Paul Lee] A South Korean court has ruled in favor of Young Poong Group in its high-profile legal dispute with Korea Zinc, siding with the company’s largest shareholder in a contentious battle over management control.
On June 27, the Seoul Central District Court ruled that Korea Zinc’s issuance of new shares to HMG Global was invalid, granting victory to Young Poong and its affiliate YPC LLC, the plaintiffs in the case.
The court found that HMG Global does not qualify as a 'foreign joint venture' as stipulated in Korea Zinc’s corporate charter, and that the new share issuance infringed upon the rights and interests of existing shareholders.
Young Poong argued that the share issuance was not made for legitimate managerial or financial purposes, but rather aimed at entrenching Korea Zinc’s current management and diluting the stake of existing shareholders. The group contended that HMG Global should not have been eligible for a third-party allocation of shares and filed suit to nullify the issuance.
The ruling marks a significant development in the ongoing power struggle between Korea Zinc and Young Poong, which together control a major portion of South Korea’s non-ferrous metal industry. As the legal battle continues, further implications may follow regarding governance standards and shareholder rights in Korean conglomerates.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
