Korea Zinc’s factory in Onsan, South Korea (Courtesy of Korea Zinc)
South Korea’s largest zinc smelter Korea Zinc Co. is accelerating its efforts to terminate the decades-long business relations with its parent Young Poong Group by dominating the group’s affiliate Sorin Corp. boardroom.
Korea Zinc said on Thursday that it nominated four new board members, including four executives of the zinc smelting company and its subsidiary, and reappointed Korea Zinc Honorary Chair Choi Chang-geun whose board member term had ended, at general shareholders’ meeting.
Through the reshuffle, nine of the 10 board members of Sorin are Korea Zinc and its affiliate executives, while the one is Youngpoong Group Advisor Chang Hyung-jin.
Sorin, which trades non-ferrous metals of Youngpoong Group’s Youngpoong Corp. and Korea Zinc, has been a key unit for the two companies’ business partnerships. Korea Zinc and its affiliated persons own 66.7%, while Youngpoong holds 33.3%.
Korea Zinc strives to separate its business from Youngpoong Group by strengthening its control over the Sorin boardroom. Chang Se-hwan, grandson of the group’s late founder Chang Byung-hee, has resigned from Sorin as chief executive after his 10-year term from 2014.
Korea Zinc said that it is difficult to maintain the partnership with Youngpoong via Sorin as there has been trading and sales issues due to Youngpoong’s production cuts and a smelter suspension after exceeding the legal limit for water pollutant discharge early this year.
Since its launch in 1949, Youngpoong Group’s major affiliates have been largely run by two families – one by the Chang family, which controls Youngpoong and electronic parts affiliates; and the other by the Choi family, which controls Korea Zinc and non-electronics subsidiaries.
But the conflicts between the two family groups have intensified as Korea Zinc, Youngpoong Group’s cash cow, has issued new shares for Hyundai Motor Group and swapped treasury stocks with Hanwha Group and LG Chem Ltd. since 2022.
Korea Zinc Chair Choi Yun-birm, who stepped down from co-CEO of the zinc smelter in March, led increasing friendly shareholders for the Choi family through rights offerings during his five-year term.
Sorin posted 17.5 billion won ($12.6 million) in operating profit and 1.53 trillion won in revenue last year. It transacted 196.4 billion won with Korea Zinc and 30.9 billion won with Youngpoong.
The trading company manages several affiliates in Singapore, Indonesia, India, Thailand and the United Arab Emirates for non-ferrous metal and chemical sales.
By Hyun-Woo Oh
ohw@hankyung.com
Jihyun Kim edited this article.
