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Photo: Korea Zinc |
[Alpha Biz= Kim Jisun] A U.S. federal court has rejected Korea Zinc’s request to halt discovery proceedings involving its U.S. subsidiary, PedalPoint Holdings—an outcome expected to influence the ongoing legal battle between Young Poong Group and Korea Zinc over the acquisition price of Igneo Holdings.
Young Poong Group announced on the 24th that the U.S. District Court for the Southern District of New York dismissed Korea Zinc’s motion to vacate or invalidate the discovery order related to PedalPoint. The ruling allows Young Poong to access key evidence in the shareholder derivative suit currently underway at the Seoul Central District Court.
According to Young Poong, the U.S. court determined that PedalPoint failed to prove that Young Poong lacked standing in the Korean shareholder lawsuit. The court further acknowledged that Young Poong is an “interested party” with legal and economic stakes in the outcome, and that the discovery request is relevant to the Korean proceedings.
Korea Zinc previously acquired U.S.-based electronic waste recycling company Igneo for approximately 580 billion KRW through PedalPoint. Young Poong argues that Korea Zinc’s management overpaid for Igneo despite its capital erosion status and filed a shareholder derivative lawsuit alleging a breach of fiduciary duty.
With the latest ruling, Young Poong now has legal authority to obtain documents, emails, internal valuation materials, negotiation records, and witness testimony from PedalPoint and its executives related to the acquisition.
Korea Zinc responded that the first-instance ruling in Korea is already out and said it plans to file an appeal and request to stay the proceedings. The company noted that any final decision on the U.S. discovery process will take considerable time due to ongoing legal steps.
Korea Zinc also emphasized that even if discovery is ultimately granted, both parties will undergo a selection process regarding what information can be provided, adding that PedalPoint turned profitable in the first half of this year with an operating profit of USD 5 million.
The first hearing for Young Poong’s shareholder derivative case in Korea is scheduled for January 29 next year.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
