Korea Zinc's Controversial Acquisition: A Profit Bonanza for Early Igneo Investors

In a significant corporate governance dispute, MBK Partners, in an alliance with Young Poong, has raised concerns over Korea Zinc's acquisition of Igneo Holdings. The deal allowed early investors to earn returns surpassing 100 times their initial investment, drawing scrutiny over the board's effectiveness under Chairman Choi Yoon-beom. The acquisition, finalized in 2022, involved Korea Zinc using funds from its U.S. subsidiary, Pedalpoint Holdings, to purchase Igneo's shares. Despite a relatively modest initial investment of $2.75 million in Igneo, Korea Zinc allegedly overvalued the company significantly, concluding the purchase at 580 billion won ($394 million). MBK claims that this instance exemplifies procurement malpractice and a lack of due diligence, with suggestions of undisclosed relationships between Choi and Igneo's initial investors. The acquisition's unconventional nature, including the quick negotiation and nondisclosure agreements, adds to the questions surrounding the transaction. MBK and Young Poong, holding significant sway as Korea Zinc's largest shareholders, are pushing for full disclosure of the sellers’ participation and connections to the chairperson.