Court rules in favor of Korea Zinc directors in shareholder lawsuit

The Seoul Central District Court has ruled against Young Poong and MBK Partners in a shareholder derivative lawsuit filed against 10 directors of Korea Zinc, including Chairman Choi Yun-beom. The plaintiffs sought approximately 837 billion won in damages, alleging that Korea Zinc's decision to conduct a treasury stock tender offer was an unlawful attempt to preserve management's positions rather than a move for the company's benefit.

The court dismissed the claims, stating that the directors' decision to acquire treasury shares did not violate their duty of care or duty of loyalty. The presiding judge noted that directors possess discretionary power in management and that the decision was made based on sufficient information and reasonable judgment without violating laws or regulations.

Young Poong and MBK Partners have announced their intention to appeal immediately, arguing that illegal management practices cannot be justified as 'managerial discretion.' Conversely, Korea Zinc characterized the lawsuit as an attempt to interfere with normal business activities to facilitate a hostile M&A.