Young Poong Loses $631 Million Shareholder Suit Against Korea Zinc Directors

A Seoul court has ruled against Young Poong in a shareholder derivative lawsuit seeking 837 billion won, or about $631 million, from Korea Zinc Chairman Choi Yun-beom and other directors of the zinc producer.

The Seoul Central District Court handed down the decision Thursday, rejecting Young Poong’s argument that the directors caused financial harm to Korea Zinc through the terms of a tender offer involving the company’s own shares. Young Poong is a major shareholder in Korea Zinc.

Young Poong filed the lawsuit in November 2024. It alleged that Korea Zinc’s directors inflicted losses on the company by arranging to purchase treasury shares at 890,000 won each when the shares’ actual price was around 560,000 won. The difference between those figures formed the core of Young Poong’s challenge to the directors’ handling of the transaction.

The court did not accept that argument. It found that the directors could not be regarded as having violated their managerial duties when the steps taken before the purchase were considered. The court also concluded that the transaction did not breach South Korea’s Commercial Act or Korea Zinc’s articles of incorporation.

The ruling is significant for the two companies because it resolves, at the trial-court level, a large damages claim tied directly to a major corporate decision. The amount sought was not a payment to Young Poong itself but damages claimed through a derivative action on behalf of Korea Zinc. The case therefore centered on whether the company’s directors should bear personal responsibility for the alleged loss.

The judgment favors Choi and the other directors on both main questions raised in the case: whether they failed to fulfill their managerial obligations and whether the share purchase violated governing corporate rules. In reaching its conclusion, the court placed weight on the process that preceded the tender offer rather than treating the gap between the tender price and the price cited by Young Poong as sufficient evidence of wrongdoing.

Young Poong’s status as a major shareholder gives the dispute broader corporate-governance importance. The decision leaves the challenged tender offer intact against the claims described in the lawsuit and rejects the requested 837 billion won award. The immediate ruling concerns the liability claim brought in the Seoul Central District Court; any further legal response by Young Poong was not stated in the initial report.