South Korea’s National Pension Service is set to give the upper hand to the current management of Korea Zinc, supporting management proposals such as cumulative voting in the shareholders’ meeting slated to take place Thursday. Holding a 4.51 percent stake in the zinc smelter, the decision by the NPS could swing the outcome of the proxy fight.
On Friday, the NPS trustee commission decided to vote for the proposals made by the current management of Korea Zinc, including the adoption of a cumulative voting system and setting a 19-person cap on the number of directors on the board.
Cumulative voting refers to a system that grants shareholders multiple votes, proportional to the number of shares they hold. The votes are multiplied by the number of directors up for election to the board of directors.
With NPS support, the current management of Korea Zinc, headed by Chairman Choi Yoon-beom, could gain the upper hand in the ongoing power struggle with the MBK-Young Poong alliance, though the coalition recently took the lead with a stake of over 40 percent in the company. Choi and his side own a 34 percent stake.
If the voting system is implemented, Choi and minority shareholders can pool their votes to certain director candidates, making it harder for the Young Poong-MBK alliance to take control of the board.
The NPS further decided to vote for three director candidates proposed by each side.
Meanwhile, Norges Bank Investment Management, the operator of the country’s Government Pension Fund, announced Saturday it has decided to vote against the adoption of cumulative voting. It holds a 1.04 percent stake in the company.
The California Public Employees' Retirement System, or CalPERS, and the California State Teachers' Retirement System, CalSTRS, also announced they plan to vote against the deployment of cumulative voting, effectively backing MBK-Young Poong.
The current management of Korea Zinc has been facing a takeover attempt by the MBK-YoungPoong alliance since September. While there have been tender offers, an attempt to raise capital, and mudslinging in the power struggle, Thursday's shareholders' meeting will be Korea Zinc's first since the conflict began.
By Im Eun-byel (silverstar@heraldcorp.com)
