November 23, 2024

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(Korea Zinc)

Korea Zinc, South Korea's leading zinc smelter, said Tuesday it will terminate its longstanding purchase and sales partnership with its largest shareholder, Youngpoong, amid a management conflict between the two companies.

"In the future, we will conduct individual negotiations and contracts with each of our business partners for the purchase of raw materials and sales of products," Korea Zinc said in a release, citing management factors, including higher material costs and contracted demand.

The partnership between Korea Zinc and Youngpoong has spanned decades, with more than 20 joint purchase and sales agreements being renewed every one to two years.

But Korea Zinc has reportedly informed Youngpoong that it will not renew several joint purchase contracts that are due for renewal and will also gradually terminate all expiring contracts, including about 10 this year.

The move comes amid an ongoing management dispute between the two companies in recent years.

Non-ferrous metals manufacturer Korea Zinc was co-founded in 1974 by Chang Byung-hee and Choi Ki-ho. Since then, the Choi family manages Korea Zinc, while the Chang family is in charge of Youngpoong Group and other electronic parts affiliates.

Since Choi Yun-beom, the grandson of the co-founder Choi Ki-ho, took office as chairman of Korean Zinc in 2022 and expressed his determination to separate his company from Youngpoong, the two families have been locked in a battle for control of the company.

The two sides clashed over a change in its charter and dividend policies at a general shareholders' meeting of Korea Zinc last month.

Subsequently, Youngpoong filed a lawsuit against Korea Zinc over the issuance of new shares, further intensifying the dispute. (Yonhap)