Key Points:
- Korea Zinc, South Korea’s leading zinc smelter, is terminating its partnership with Youngpoong, its largest shareholder, amid a management conflict.
- The decision will lead to individual negotiations and contracts with business partners for raw material purchases and product sales.
- The management conflict stems from a battle for control between the Choi and Chang families, who co-founded Korea Zinc.
- Choi Yun-beom’s appointment as chairman of Korea Zinc in 2022 intensified tensions, leading to disputes over company policies.
Korea Zinc, the leading zinc smelter in South Korea, announced on Tuesday its decision to terminate its longstanding purchase and sales partnership with its largest shareholder, Youngpoong. This move comes amidst a management conflict between the two companies, prompting Korea Zinc to opt for individual negotiations and contracts with its business partners to purchase raw materials and sell products.
The partnership between Korea Zinc and Youngpoong has been in place for decades, with over 20 joint purchase and sales agreements being renewed every one to two years. However, Korea Zinc has informed Youngpoong that it will not renew several joint purchase contracts due for renewal and will gradually terminate all expiring contracts, including approximately 10 contracts this year.
The management dispute between the two companies has been ongoing in recent years. Korea Zinc, co-founded in 1974 by Chang Byung-hee and Choi Ki-ho, has been managed by the Choi family, while the Chang family oversees the Youngpoong Group and other electronic parts affiliates.
The conflict escalated after Choi Yun-beom, the grandson of co-founder Choi Ki-ho, assumed the position of chairman of Korea Zinc in 2022. Choi expressed his determination to separate Korea Zinc from Youngpoong, sparking a battle for control between the two families.
Tensions between the Choi and Chang families peaked during a general shareholders’ meeting of Korea Zinc last month, where they clashed over changes in the company’s charter and dividend policies. The disagreement escalated when Youngpoong filed a lawsuit against Korea Zinc over issuing new shares, adding fuel to the ongoing dispute.
