Seoul: Proxy firm Glass Lewis on Tuesday expressed support for four nominees for board members of Korea Zinc Co. recommended by the smelter amid a battle for control over the firm between the company chairman and an alliance led by its biggest shareholder, Young Poong Corp.
According to Yonhap News Agency, the Glass Lewis recommendation comes about a week before the world's biggest zinc smelter will hold a shareholders' meeting on Jan. 23 to vote on the appointment of two groups of new board members proposed by Korea Zinc and the Young Poong-MBK Partners alliance. The current board consists of 12 directors, with Korea Zinc and the Young Poong camp proposing seven and 14 additional members, respectively, to gain a bigger say in management decisions. The appointment is subject to a shareholder vote.
Glass Lewis has advised shareholders to initially vote for the adoption of a cumulative voting system in director elections and to limit the total board size to 19 directors. If the proposals are adopted and implemented, investors "should cumulate their votes" on four out of the seven nominees, as stated in Glass Lewis's recommendation note. Among the nominees are Lee Sam Sang-hoon, former Korea head at Affinity Equity Partners, and James Andrew Murphy, a senior adviser at U.S.-based consulting firm Oliver Wyman.
Glass Lewis highlighted the contrasting visions for Korea Zinc that shareholders must choose between at the upcoming meeting. "On one side, the company has touted its 'Troika Drive' strategy, which focuses on diversifying into new businesses with the stated aim of achieving long-term growth and value creation," Glass Lewis noted. "On the other side, the dissident group (Young Poong side) advocates significantly curtailing the company's investments in newer ventures and prioritizing stronger short-term returns."
Korea Zinc has been embroiled in a prolonged battle against a takeover bid by the MBK-Young Poong alliance, which initiated the management tussle on Sept. 13 by launching a tender offer for an additional stake in the smelter. In response, Korea Zinc, with support from U.S.-based Bain Capital, conducted a massive stock buyback. Currently, the Young Poong camp controls 40.97 percent of Korea Zinc, while Korea Zinc Chairman Choi Yun-beom and related parties own about 34 percent of the company.
The upcoming "majority" vote on board member appointments is seen as a pivotal decision regarding the takeover, with the 4.51 percent stake controlled by the National Pension Service considered a critically important voting bloc.