By Kwanwoo Jun
Korea Zinc's shares climbed Monday as rival shareholders look set to renew their battle for control over the world's largest zinc smelter.
A feud in Korea Zinc's boardroom is likely to have been reignited by a Seoul court's ruling late Friday that eased the way for Young Poong, a leading shareholder backed by private equity firm MBK Partners, to exercise its voting rights.
That boosted Korea Zinc's stock by 14%, its sharpest daily percentage gain in three months, as investors looked to possible fireworks at its regular shareholders' meeting due late March.
Signs of a renewed fight for control of Korea Zinc prompted traders to pile into the stock, as the previous skirmish between Young Poong--a company specializing in mining, electronics-component and book-selling industries--and shareholders led by Korea Zinc Chairman Yun B. Choi prompted the rival shareholders to build their stakes and power shares higher.
In January, shareholders led by Choi introduced a cumulative voting system--which allows more flexibility in how votes are cast for selecting board members--and a 19-member cap on the company board, in order to fend off the MBK-Young Poong alliance, which had sought to add 14 new members to the then 12-member board.
Korea Zinc's management under Choi also created a complex circular shareholding ownership structure to limit the voting rights of the MBK-Young Poong alliance. The alliance later sought a court injunction to nullify the series of moves; the Seoul court on Friday ruled for the cumulative voting system but against the company's limit on the board size and the voting rights of the alliance.
Meanwhile, Young Poong's shares were 8.9% higher Monday after its announcement that it would cancel all the treasury shares it owns by March.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
03-10-25 0402ET
