Korean Court Rules Against Young Poong in Shareholder Lawsuit

A Seoul court has sided with Korea Zinc Co. directors in a shareholder derivative lawsuit filed by Young Poong Corp., a major shareholder. The lawsuit sought 837 billion won in damages, alleging the directors made a flawed tender offer to buy back shares, Yonhap News Agency, South Korea's national news agency reported on Thursday.

The Seoul Central District Court found no evidence of managerial duty violations by Korea Zinc's directors. The court cited the steps taken before the share purchase as justification for its ruling.

Young Poong Corp. and its ally MBK Partners Ltd. plan to appeal, citing erosion of shareholder value. They argue the ruling overlooks harm to Korea Zinc's financial soundness and shareholder value.

The dispute is part of a larger battle for control of Korea Zinc, which ended in March 2025. Young Poong currently holds a 34 percent stake in Korea Zinc.

The company's directors were accused of making a tender offer to buy back shares at an inflated price. The offer was allegedly made to protect the position of Korea Zinc's chairman.

Young Poong and MBK Partners had launched a competing tender offer during the dispute. The two sides have significant stakes in Korea Zinc, with chairman Choi and related parties holding 17 percent.

The court's decision has significant implications for shareholder value and corporate governance in South Korea.