Gov’t warns of stern responses to illegalities over Korea Zinc battle

The chief of the financial regulator has warned of stern responses to any illegalities regarding the intensifying competition for the control of Korea Zinc Inc., his office said Sunday. The battle surrounding the world's top zinc smelter has heated up recently as MBK Partners teamed up with Korea Zinc's biggest shareholder, Young Poong Corp., and launched a public tender offer in mid-September to acquire up to 14.61 percent. The initial tender offer price for shares in Korea Zinc was 660,000 won (US$495) per share, but they raised it to 750,000 won last week in an effort to lure investors, with the tender offer set to end Oct. 4. "The ongoing public offer appears to be seen as a heated competition among entities concerned. Excessive competition could cause market instabilities and hamper the confidence of the capital market," Lee Bok-hyun, chief of the Financial Supervisory Service (FSS), said during a meeting with officials Friday. "We will closely monitor the market to see if there is any illegal tradi ng and launch a probe swiftly if needed," Lee said, instructing officials to take stern measures against illegal acts on a zero-tolerance stance. Korea Zinc has called the move a "hostile and predatory" takeover, and is working to secure support from various entities. As of early September, Young Poong and investors supportive of it controlled a 33.13 percent stake, while Korea Zinc's current management and its supportive investors controlled a 33.99 percent stake, according to industry sources. Korea Zinc was co-founded in 1974 by Chang Byung-hee and Choi Ki-ho, and the Choi family has since managed the smelter while the Chang family was in charge of Young Poong and other electronic parts affiliates. In 2022, Choi's grandson, Yun-beom, became chairman of the company and has sought to separate it from Young Poong, sparking the current battle for control. Source: Yonhap News Agency