Korea Zinc voting rights dispute reaches Supreme Court

The Supreme Court of Korea has upheld a lower court ruling that Korea Zinc’s attempt to restrict the voting rights of its largest shareholder, Young Poong, during a January 2025 extraordinary general meeting was unlawful. The court determined that Sun Metals Corporation (SMC), an Australian subsidiary of Korea Zinc, cannot be classified as a “subsidiary” under Article 369, Paragraph 3 of the Commercial Act, meaning it could not be used as a legal basis to limit Young Poong’s voting power.

Young Poong and MBK Partners argued that the ruling confirms management used overseas subsidiaries to create a cross-shareholding structure to block the largest shareholder’s rights. They are now pushing for the appointment of independent audit committee members at the upcoming extraordinary general meeting on September 9 to mitigate management risks.

In response, Korea Zinc stated that the ruling is limited to the legal relations of the January meeting and does not affect the current management structure established during the March 2025 regular general meeting, where the company won a separate injunction case. Korea Zinc also dismissed claims that this decision impacts ongoing Fair Trade Commission investigations into potential circular shareholding, asserting that the court only addressed the legal status of SMC under the Commercial Act.