Korean Zinc Giant Korea Zinc in Focus of Heated Voting Rights Battles

The shares of Korea Zinc Co., one of the world's leading zinc processors, saw an impressive surge of up to 10% on Monday. The catalyst was the announcement that the largest pension fund in the country, the National Pension Service, will support some proposals from CEO Yun B. Choi at the upcoming extraordinary general meeting. The fund, which held 4.51% of Korea Zinc as of the end of October, has decided to endorse both the cumulative voting system and the limitation of the number of board members to 19. This meeting, convened by the private equity firm MBK Partners and the main shareholder Young Poong Corp., is set against the backdrop of a takeover battle after Choi was repeatedly accused of mismanagement and neglecting minority shareholders. The duel between Choi and the MBKP-Young Poong consortium is a classic case of corporate takeover. Both sides have so far failed in their attempts to gain control through higher bids. Choi, on the other hand, rejects the takeover as "predatory M&A" and has announced a stock buyback program with the support of Bain Capital. The upcoming shareholder meeting promises tension, especially since proxy advisors' recommendations are divided. Institutional Shareholder Services advises against all seven directors proposed by Korea Zinc, as the cumulative voting system is viewed more as a tool for Choi to secure his management control. In contrast, Glass Lewis supports the introduction of the system and some of the proposed candidates. After the initial surge, the shares managed to hold onto a significant portion of the gains and were still up about 7% at last check. It remains to be seen what outcome the heated vote will bring for the world's largest zinc smelter.