Korea Zinc gains board edge with audit committee win

Korea Zinc secured a crucial audit committee seat Wednesday, gaining a tactical advantage in its protracted battle for management control against the Young Poong-MBK Partners alliance.

At an extraordinary shareholders' meeting held at a Seoul hotel, Korea Zinc board-backed nominee Baek In-kyoo was elected with 5,092,815 votes, representing 81.8 percent of voting rights represented at the meeting.

Park Yoo-kyung, nominated by Young Poong and MBK, failed to be elected after receiving 1,739,065 votes, or 27.93 percent.

Baek is a professor of data and knowledge service engineering at Dankook University whom Korea Zinc describes as an expert in accounting, auditing and internal controls. A certified public accountant in both Korea and the US, he previously served as chair of the board of partners and head of the ESG Center at Deloitte Korea.

Park previously headed Asia-Pacific responsible investment and governance at Dutch pension fund manager APG Asset Management. Young Poong and MBK said she was selected through a three-stage review by an independent committee following a public nomination process open to governance experts and all shareholders holding at least one share.

The audit committee seat emerged as the central battleground because of new voting rules that substantially increased the influence of minority shareholders.

Under Commercial Act revisions that took effect July 23, major shareholders and their related parties are subject to a combined 3 percent voting cap when electing audit committee members.

The rule limited the voting power of both rival camps — as well as that of the National Pension Service, which owns more than 5 percent of Korea Zinc — to 3 percent each.

The NPS supported both Baek and Park, leaving minority shareholders, foreign institutions and domestic asset managers to determine the outcome.

An independently elected audit committee member can examine internal management documents and accounting records, providing an important check on board decisions during the control dispute regardless of which side holds a broader board majority.

Before electing Baek, shareholders approved the addition of another separately elected audit committee seat. The proposal received support from all votes represented at the meeting and 98.4 percent of total voting rights.

With one member already separately elected, Baek’s appointment brings the number to two. Under the revised Commercial Act, listed companies with assets of at least 2 trillion won ($1.49 billion) must have two or more audit committee members elected separately from other directors.

Shareholders also elected four outside directors.

Korea Zinc’s board and a shareholder allied with Chair Yun B. Choi nominated Hanyang University law professor Lee Hyung-kyu and Sangmyung University economics professor Seo Eun-sook. Young Poong and MBK nominated Sungkyunkwan University law professor Lee Jun-bong and attorney Shim Hye-seop.

Shim received the most votes, followed by Lee Jun-bong, Lee Hyung-kyu and Seo.

Following the meeting, Korea Zinc’s board comprises 12 directors aligned with Choi and seven affiliated with Young Poong and MBK.