'The Jang family holds shares; the Choi family manages operations...'
This sentence summarizes Koray Zinc's partnership spanning over 75 years. After founders Jang Byeong-hee and Choi Ki-ho established Yeungpoong in 1949, Koray Zinc was founded in 1974, separating management control. The Jang family took charge of Yeungpoong, Yeungpoong Bookstore, and electronics/device businesses, while the Choi family managed Koray Zinc and non-ferrous metal operations. With Yeungpoong becoming Koray Zinc's largest shareholder, the partnership continued.
When Choi Yun-beom (Chairman), who assumed office in 2022, pushed forward with a new business initiative called 'Troika Drive,' conflicts of interest between both sides began to emerge. The young Choi (Chairman), born in 1975, pursued third-party allocation rights offerings (paid-in capital increases) and other measures to fund new investments and secure financing. During this process, the proportion of friendly shares held by companies such as Hyundai Motor Group, Hanwha, and LG Chem increased significantly. The Choi (Chairman) family's shareholding stood at around 11%, but when all various shareholdings were combined, it reached a level comparable to Yeungpoong's side (approximately 33%).
Compounding the issue, Yeungpoong arranged for Koray Zinc to process waste materials such as cadmium from Seopo Smelter, deepening the rift between both sides and causing cracks in their 'trust.' While the Jang family's rationale for partnering with private equity firm MBK Partners to acquire Koray Zinc shares centered on allegations of mismanagement and market manipulation by the management team, Jang Hyung-jin, a second-generation Yeungpoong founder, stated firmly that "it would be preferable for this era of joint family management to come to an end here."
As the MBK-Yeungpoong alliance secured over 40% of shares through share acquisitions, Choi (Chairman)'s side found itself on the defensive. However, they mobilized various measures, including restricting Yeungpoong's voting rights through a circular investment structure linking Koray Zinc → SMH → Yeungpoong → Koray Zinc, to retain management control. A key move was attracting U.S. government investment. Koray Zinc conducted a third-party allocation rights offering (paid-in capital increase) targeting its joint venture with the U.S., Crucible JV, enabling Crucible JV to secure approximately 10% of Koray Zinc's shares.
As a result, a shareholding structure emerged with Choi (Chairman)'s side holding around 39% in friendly shares and MBK-Yeungpoong holding approximately 42%, a balance that has persisted to date. Consequently, both Koray Zinc and MBK-Yeungpoong have expended enormous amounts of capital. With mutual defamation and lawsuits continuing, evaluations emerged stating that "only law firms and securities firms have grown fat from the Koray Zinc management rights dispute."
After two years of conflict, fatigue has reached extreme levels, yet the final destination still appears distant. Following the reorganization of Koray Zinc's board into 12 members aligned with Choi (Chairman) and 7 members aligned with MBK-Yeungpoong at the '53rd Extraordinary General Meeting' held on the 9th, MBK-Yeungpoong declared that "the turning point will come at next year's regular general meeting," signaling another confrontation. At the regular general meeting scheduled for March next year, the terms of eight Koray Zinc directors and one independent audit committee member will expire simultaneously.
in INDUSTRY
