SEOUL, South Korea--(BUSINESS WIRE)--Korea Zinc (KRX:010130), a global leader in non-ferrous metal production and a key player in strategic industries, today hosted a media conference and issued an official statement to the media following the dismissal of MBK-Young Poong’s second injunction to suspend the company’s share buyback.
This ruling reaffirms Korea Zinc’s position in its ongoing defense against a hostile takeover attempt. The company also reiterated its commitment to proceed with its share buyback at a price of KRW 890,000 per share, safeguarding the interests of the shareholders while continuing its long-term strategy to strengthen its leadership in key sectors, including semiconductors, secondary battery materials, and renewable energy.
A full statement from Korea Zinc is attached below:
Official Statement from Ki-Deok Park, President of Korea Zinc
Hello, this is Ki-Deok Park, President of Korea Zinc.
First of all, I would like to thank our shareholders, partners, and the public for their support and encouragement during these difficult times. I would also like to take this opportunity to thank all our employees for their united efforts to stop the hostile M&A against Korea Zinc.
I stand here today to convey Korea Zinc’s firm and resolute determination to our shareholders, investors, employees, partners, and the people of Korea.
Looking back, it has been nearly 40 days since MBK and Young Poong's hostile and predatory public tender offer was abruptly launched just before the Chuseok holiday, one of our nation's most significant holidays.
MBK and Young Poong launched their public tender offer on Friday, September 13, just before the start of the Chuseok holiday. Their goal was to exploit the extended Chuseok break, as well as several following public holidays and weekends, leaving only 11 business days for a proper response. Through this, they attempted to cripple Korea Zinc’s ability to effectively react and defend itself.
It seems that, after carefully preparing for their attack in secret over a long time, they chose this date specifically, under the belief that if they could tie Korea Zinc’s hands and feet for just 11 business days, they would be able to easily seize the company at the bargain price of KRW 660,000 per share.
They also filed a preliminary injunction to prohibit Korea Zinc from purchasing its own shares simultaneously with their public tender offer, aiming to block our only means of response. Additionally, they also deployed unorthodox tactics unheard of in standard legal practice for injunction disputes. They submitted their initial application only to withdraw it immediately, then refiled an identical injunction, likely to delay the hearing. At the same time, they spread rumors that Korea Zinc’s purchase of its own shares was declared illegal.
Then, when the preliminary injunction was denied, they immediately filed a second injunction alleging the same issues as the first one. They were seemingly anticipating this outcome as they filed it just two hours after the denial and even before the board resolution to acquire Korea Zinc’s shares was made public. The second preliminary injunction application even incorrectly stated that the company's tender offer price was KRW 800,000.
Exploiting the fact that their public tender offer would be completed before Korea Zinc’s, they attempted to lure investors to their own bid. They spread baseless claims that Korea Zinc’s public tender offer was illegal and could be rendered void due to the second injunction, thus creating uncertainty for investors and the market. This behavior constitutes an abuse and misuse of the legal process.
Furthermore, MBK misled the market and deceived investors by falsely claiming without basis that KRW 660,000 per share was a sufficient premium price, suggesting no further increase. Shortly after, they raised their offer to KRW 750,000, and ultimately, on the last day of the tender offer, just before market close, they increased it to KRW 830,000 won, which the exact price they had previously criticized as high-priced buying and a breach of trust. On the other hand, Young Poong's CEO, Kang Sung-Doo, repeatedly made brazenly false claims inconsistent with their own narrative that Korea Zinc's corporate value exceeded KRW 1,000,000 per share, further contributing to the market disruption.
The stock market was rife with rumors and defamatory statements that can only be described as purposeful and intentional, which caused extreme volatility in Korea Zinc's stock price. It is hard to dismiss the suspicion that MBK and Young Poong were at the center of it all.
As a result, 5.34% of shareholders and investors found themselves engaging in what could be called "induced adverse selection" under irrational market conditions. They sold their shares at KRW 830,000 each, forfeiting the opportunity to sell at KRW 890,000 per share, thus incurring investment losses by giving up guaranteed profits.
By now, you should be well aware of how these companies have been manipulating the market and misleading investors by intentionally spreading false claims over issues that will eventually be clarified at court.
Today, I would like to take this opportunity to make it clear once again that we will hold them accountable for their actions.
First of all, it is my belief that MBK and Young Poong's actions of filing consecutive preliminary injunctions, while spreading unilateral claims before a ruling has been made was to introduce uncertainty and confusion into the market. This has lured uneasy investors into responding to MBK's public tender offer instead of subscribing to Korea Zinc's share buyback offer, which was KRW 60,000 higher per share. Such actions could constitute market manipulation, fraudulent trading practices, and other market-disruptive behavior.
This is starkly evident when compared to the circumstances of Young Poong Precision's public tender offer, which proceeded normally without any injunction disputes. MBK and Young Poong's tender offer for Korea Zinc is an abnormal transaction that could not have occurred under fair and equitable circumstances. As to why the 5.34% shareholders chose to do this, you, the journalists here, should already be well aware.
As a result of this abnormally induced transaction, shareholders have suffered direct losses. Such behavior is nothing short of anti-market conduct that undermines a healthy capital market. If investigations and inquiries reveal market disruption due to price manipulation and fraudulent trading, the legality and validity of the public tender offer by Young Poong and MBK could be subject to significant legal flaws.
Furthermore, there is one fact I must make clear.
MBK, Young Poong, and advisor Jang Hyung-jin have never managed Korea Zinc.
Despite this fact, MBK and Young Poong have argued that their public tender offer was not hostile, claiming that it was not about taking control but rather about expanding management rights, under the pretense that being major shareholders meant they were already exercising management authority. However, in court, while asserting the legitimacy of their high public tender offer price, MBK and Young Poong justified that their offered price included a control premium typically used when newly acquiring management rights, thereby clearly indicating that they were, in fact, attempting to take control of something they do not possess. They have been spreading contradictory claims such as this to the market and investors without any sense of guilt.
MBK and Young Poong have never conducted any due diligence on Korea Zinc, nor do they truly understand or value the company.
MBK lacks the expertise or capability to analyze, evaluate, or discuss the business and value of Korea Zinc, and is nothing more than a corporate raider, which only knows how to use its massive capital as a weapon to aggressively pressure its targets and plunder profitable companies at bargain prices.
While Korea Zinc has achieved 98 consecutive quarters of profitability over the past 25 years, delivering one of the highest levels of shareholder returns in the country through dividends and social contributions, Young Poong has long been criticized for its poor financial performance and environmental issues.
In addition, MBK and Young Poong have not provided any concrete plans throughout the tender offer process on what strategies and methods they intend to employ to increase the corporate value of Korea Zinc through their new management team.
Rather, they claimed they would inherit current management's “Troika Drive” strategy of secondary battery materials, new and renewable energy, and resource recycling, and continue business partnerships with domestic and foreign investors such as Hyundai Motor Group, LG Group, and Hanwha Group that the current management has built through great effort. At the same time, Young Poong is pursuing a lawsuit against Hyundai Motor Group, claiming that the issuance of new shares to Hyundai Motor Group is invalid.
MBK and Young Poong also promised vaguely to improve the governance structure of Korea Zinc, which is nothing more than a rhetorical slogan absent of any concrete plans.
The current board composition and governance structure of Korea Zinc is exemplary, with independent directors making up the majority, and relies on the dedication and support of the employees who built Korea Zinc to what it is today. It is truly absurd for a corporate raider like MBK or an incompetently managed company like Young Poong to even mention the notion of improving the structure of Korea Zinc's corporate governance.
Before MBK and Young Poong discuss Korea Zinc’s governance, Young Poong should first examine their own. With all their internal directors, including the CEO, currently under arrest, three of their independent directors have disposed of Young Poong’s most valuable blue-chip asset, its multitrillion-won stake in Korea Zinc, at a bargain price to MBK, all without publicly disclosing the process or conditions. Young Poong should be focusing their efforts in addressing who was behind this decision, and who the real controlling forces are behind their attempt to initiate a public tender offer for Korea Zinc.
If MBK understood why Young Poong's market capitalization is less than KRW 700 billion, despite holding Korea Zinc shares allegedly worth trillions of KRW, they should have not launched an attack on a robust and well-managed, top-tier company like Korea Zinc. Instead, they should have demonstrated their own logic of increasing corporate value and governance by improving Young Poong's own corporate value and improving its governance.
Dear our shareholders and investors, our partners and the local community,
Over the past 40 days, the management and employees of Korea Zinc have been fighting an uphill battle against entities beyond reason. Forces that have not offered reasonable analyses of the company’s business and value or legitimate proposals for alternatives and instead have repeated lies, disseminated falsehoods, exploited holidays, and manipulated and abused litigation, seeking to plunder the company through deceit and schemes. The management and employees of Korea Zinc are making every effort to protect the company’s history and future. Looking back, this has been a time we could endure only with the support and encouragement of our shareholders, investors, partners, and the local community.
I would like to express my sincere gratitude to all of you.
President of Korea Zinc
Ki-Deok Park
