Yongpoong and MBK Partners, the largest shareholders of Korea Zinc, have officially submitted proposals to introduce a share split and an executive director system to enhance corporate governance ahead of the annual shareholders' meeting in March.
Yongpoong and MBK Partners, who are the primary shareholders of Korea Zinc, announced on March 12 that they have officially submitted shareholder proposals in advance of the upcoming annual shareholders' meeting. The proposals include reflecting the duty of loyalty of directors toward shareholders in the company's articles of incorporation and advancing the initiative for a share split to enhance shareholder value. The rationale behind these proposals is to restore the value of shareholders that has been affected by distorted corporate governance and to re-establish the fundamental functions of the board of directors and the shareholders' meeting.
One major focus of the submitted proposals is the addition of a provision in the company’s bylaws to clearly define the fiduciary responsibility of directors toward shareholders, in accordance with Article 382-3 of the Commercial Act, which was amended last year. This provision aims to ensure that directors are held accountable for fulfilling their duties not only to the company but also to its shareholders. Furthermore, the proposals emphasize the need to protect the interests of all shareholders during new stock issuances, thus preventing potential value deterioration from actions led by the existing management.
Additionally, the proposal calls for the full adoption of the 'executive director system' to advance governance structures by clearly separating operational duties from oversight functions, thereby restoring the independent supervisory functions of the board. Other recommendations include appointing the chairperson of the shareholders' meeting not as the representative director but as the chairman of the board itself and extending the notice period for board meetings from one day before the annual shareholders' meeting to three days. Another significant initiative put forward is a 10-for-1 stock split, aimed at increasing stock liquidity and accessibility for individual investors. This move is expected to enhance overall shareholder value, along with a proposal to convert retained earnings of 392.4 billion KRW into distributable earnings to enable quarterly dividends even if all treasury stocks are retired.
