Korea Zinc Omits Plan for Paid-In Capital Increase?... Financial Supervisory Service "Possesses of Illegal Transactions"

Chairman Choi's side trailed by 3.4%p after burning the tender offer
Chairman Choi's side will lead by 0.5%p if capital increase is successful
Controversy over the plan to pay off debts that surged during the tender offer process
Stock prices plunge for two days after announcement of 670,000 won-per-share capital increase

[Anchor]
The impact of the Korea Zinc crisis, which announced that it would raise 2.5 trillion won in paid-in capital at a price of 200,000 won per share lower than the tender offer price, is growing.

Amid a sharp drop in stock prices for the second day and a series of damage to investors, financial authorities warned of a strict response, saying there was a situation in which they prepared a paid-in capital increase during the tender period.

Lee Seung-eun reports.

[Reporter]
If Korea Zinc burns the treasury stocks secured through tender purchases, Chairman Choi Yoon-beom's stake will be 39.27% and Chairman Choi's stake will be 42.67 in the Youngpoong-MBK alliance, which will be 3.4%p behind.

However, according to the paid-in capital increase plan announced by Korea Zinc, Chairman Choi's stake will be 0.5%p ahead, including the allocation of the employee stock ownership association.

Korea Zinc has set out to repay its debts for the purpose of capital increase, but most of its debts have soared in the tender process, sparking controversy.

In addition, the stock price, which recorded 1.138 million won as of the closing price on the 24th due to the announcement of a capital increase of 670,000 won per share, plunged two days a year and fell below 1 million won.

The Corporate Governance Forum blasted such a large, unexpected capital increase as market disruptions.

He pointed out that the self-harm strategy of buying treasury stocks for 890,000 won by borrowing and issuing stocks for 670,000 won through a paid-in capital increase is an unthinkable idea considering that the owner of the company is the entire shareholder.

In addition, there is a situation in which a paid-in capital increase has been prepared during the tender offer period.

This is a revised tender offer report by Korea Zinc on the 11th.

'We are not developing any specific future plans to bring changes to the Company's financial structure after this tender offer.'

However, only three days later, Mirae Asset Securities, the lead company in recruiting paid-in capital increase, conducted a corporate audit.

The Financial Supervisory Service also said that there are many possibilities of fraudulent transactions and that if illegal activities are confirmed, it will take strict measures such as transferring investigative agencies.

If Korea Zinc knew all of its plans to acquire and incinerate treasury stocks by borrowing and then pay them back with a paid-in capital increase, it stressed that the tender offer report was missing significant matters.

[Ham Yong-il / Vice President of the Financial Supervisory Service: We will examine specific facts, including how the capital increase was promoted at the same time during the tender period, and hold the relevant securities companies strictly accountable if allegations of illegal transactions such as illegal means, plans, or hierarchies are confirmed.]

The situation is expected to spread public opinion that a revision of the commercial law, which includes directors' duty to be faithful to shareholders, is necessary.

I'm YTN's Lee Seung Eun.



Filmmaker: Hong Seong-no