Korea Zinc filed a police complaint on the morning of the 5th against its largest shareholders Youngpoong and MBK Partners for allegedly misusing the 'Project Crucible' name for its US integrated smelter project. The company accused the shareholders of registering a domain combining the project name and Tennessee on June 27, distributing reception invitations in early July, and hosting a July 9 event that caused confusion about the project's ownership. Youngpoong and MBK Partners issued a statement the same afternoon denying the allegations and claiming Korea Zinc was attacking legitimate shareholder activities. The dispute stems from Korea Zinc's December 15 announcement of a $7.4 billion investment to build a large integrated smelter in Tennessee with the US government and strategic investors.
Korea Zinc Files Police Complaint Against Youngpoong and MBK Partners
Korea Zinc filed a complaint with Seoul Jongno Police Station on the morning of the 5th against Korea Corporate Investment Holdings, Youngpoong, MBK Partners Vice Chairman Yoon Jong-ha, and Youngpoong Mungo Holdings CEO Jang Se-hwan on charges of violating the Unfair Competition Prevention Act and obstruction of business.
The company alleged that the opposing parties registered a domain combining the project name and the US state of Tennessee on June 27, and distributed reception invitations with the project name to Tennessee state government officials and others in early July, causing confusion that Korea Zinc was the event host.
Korea Zinc also claimed that at a local reception on July 9, MBK introduced its global investment portfolio and made remarks suggesting that Youngpoong's Seokpo smelter technology could be applied to the project, thereby obstructing business.
A Korea Zinc official stated: "MBK and Youngpoong filed an injunction with the court the day after Korea Zinc announced the Project Crucible initiative, attempting to block the project. Now acting as if they are the project owners is an act of deceiving both governments and investors and shareholders."
Youngpoong and MBK Partners Deny Allegations in Afternoon Statement
Youngpoong and MBK Partners countered that the essence of this matter is not about name usage, but rather Korea Zinc's problematic targeting of the largest shareholder's legitimate shareholder activities.
In a statement released that afternoon, they stated: "Korea Zinc is a company of all shareholders, not a company of specific management individuals. Attacking shareholders using company funds and in the company's name over activities to enhance corporate value is typical behavior of outdated management privatizing the company."
Regarding the name issue, they maintained it was a baseless claim. Youngpoong and MBK Partners stated: "'Project Crucible' is not a registered trademark with exclusive rights held by Korea Zinc, and the project name and business content have been publicly disclosed by Korea Zinc itself."
They added that they merely held a communication event with clearly identified hosts, stating: "Defining this as impersonation or business mark infringement is a forced argument that distorts both facts and legal principles."
Parties Dispute Interpretation of December Injunction Filing
The parties also differed in their interpretation of the injunction filed in December. Youngpoong and MBK stated that the injunction "was not to block the project itself, but to stop the illegal attempt by inside director Choi Yoon-beom to defend management rights by increasing friendly shares through an irregular new share issuance that was unnecessary in the transaction structure, using the project as an excuse." They added: "Project execution and shareholder rights protection are compatible values."
Youngpoong and MBK Partners stated: "Inside director Choi Yoon-beom must immediately stop the behavior of using the company's assets, organization, and external communication channels as means to defend his management rights," adding "What management should do is not attack the largest shareholder, but enhance corporate value and protect the interests of all shareholders."
Project Crucible Background and Court Ruling
Project Crucible is a project that Korea Zinc announced on December 15 to invest $7.4 billion (approximately 11 trillion won) together with the US government and strategic investors to build a large integrated smelter in Tennessee. At that time, MBK and Youngpoong filed an injunction to prohibit new share issuance to block the third-party capital increase for this investment, but the court rejected it.
FAQ
What did Korea Zinc accuse Youngpoong and MBK Partners of on the 5th?
Korea Zinc filed a police complaint on the morning of the 5th accusing Youngpoong and MBK Partners of violating the Unfair Competition Prevention Act and obstruction of business. The company alleged that the shareholders registered a domain with the Project Crucible name on June 27, distributed reception invitations in early July, and hosted a July 9 event that caused confusion about project ownership.
How did Youngpoong and MBK Partners respond to Korea Zinc's complaint?
Youngpoong and MBK Partners issued a statement the same afternoon denying the allegations. They stated that Korea Zinc was attacking legitimate shareholder activities aimed at enhancing corporate value, and that Project Crucible is not a registered trademark with exclusive rights held by Korea Zinc. They maintained that their communication event clearly identified the hosts and was not impersonation.
What is Project Crucible and when was it announced?
Project Crucible is a project that Korea Zinc announced on December 15 to invest $7.4 billion together with the US government and strategic investors to build a large integrated smelter in Tennessee. MBK and Youngpoong previously filed an injunction to block the third-party capital increase for this investment, but the court rejected it.
