Financial Research Service: “Korea Zinc paid-in capital increase, illegal trade”

◀ Anchor ▶

The situation at Korea Zinc, which is in the middle of a dispute over management rights, is entering another phase.

The Financial Supervisory Service has begun investigating Korea Zinc’s recently announced large paid-up capital increase plan.

The Financial Supervisory Service is investigating the possibility of fraudulent transactions.

This is reporter Park Yoon-soo.

◀ Statement ▶

The Financial Supervisory Service conducted an on-site investigation of Mirae Asset Securities.

Mirae Asset is leading the previously announced ‘paid up capital increase’ by Korea Zinc.

Korea Zinc announced the day before yesterday that it will increase capital through a public offering worth 2.5 trillion won.

Although the justification was to significantly increase the number of shareholders, it was interpreted as an intention to collect friendly shares against MBK and Youngpoong, who are involved in a dispute over management rights.

The problem is, at the time of Korea Zinc’s previous tender offer, he said, “We are not establishing specific future plans that would change the company’s financial structure.”

The financial authorities believe that if Korea Zinc had already prepared a paid-up capital increase, contrary to what has been announced, the tender offer report can be seen as a false statement.

The Financial Supervisory Service explained that if Korea Zinc’s board of directors knew of both the plan to acquire and cancel treasury stock and the plan to repay the loan through a paid-in capital increase and go further with the procedure, there could be a fraudulent transaction.

Previously, Korea Zinc announced that it would use 2.3 trillion won, most of the money raised through a paid-up capital increase, to “pay back loans,” citing suspected that they were trying to pay back the tender offer price with shareholders’ money.

The Financial Supervisory Service announced that it will actively refer cases to investigative agencies if illegal activity is confirmed.

[함용일/금융감독원 부원장]

“If any illegal charges are confirmed, such as illegal transactions using unfair methods, plans or hierarchies, we hold not only that company but also the security companies appropriate.”

While MBK is considering legal action, including an application for a preliminary injunction to prevent Korea Zinc from issuing new shares, Korea Zinc’s stock price fell more than 7% yesterday and closed at 998,000 won.

The stock price of Korea Zinc fell below 1 million won in 5 trading days, and its market capitalization advanced by more than 11 trillion won in two days.

This is Park Yoon-soo from MBC News.

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