Korea Zinc control dispute expands as courts uphold affiliate and contract rulings

  • The Supreme Court upheld the finding that Sun Metal Corporation was not a Commercial Act subsidiary and rejected Jang Hyung-jin’s re-appeal over contract production.
  • Korea Zinc acquired 10.33% of Young Poong, which held 25.42% of Korea Zinc, while KZ Precision’s related derivative lawsuit is valued at approximately 930 billion won.
  • The rulings concern the January 2025 voting-rights dispute and disclosure of the September 12, 2024, management agreement, while Korea Zinc said its March 2025 governance remained unaffected.

South Korea’s Supreme Court upheld a ruling that Korea Zinc’s Australian affiliate Sun Metal Corporation did not qualify as a subsidiary under Article 369, Paragraph 3 of the Commercial Act, limiting Korea Zinc’s use of mutual-share provisions to restrict voting rights attached to Young Poong’s 25.42% Korea Zinc stake at a January 2025 meeting. In a related proceeding, the court rejected Young Poong advisor Jang Hyung-jin’s re-appeal, finalizing orders to produce the September 12, 2024, management cooperation agreement between Young Poong, Jang and Korea Corporate Investment Holdings, MBK Partners’ special purpose vehicle. The documents will be examined in KZ Precision’s approximately 930 billion-won shareholder derivative lawsuit, while the parties continue to dispute the rulings’ implications for Korea Zinc’s governance, overseas-affiliate structures and the Korea Fair Trade Commission’s review.

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