Korea Zinc’s incumbent management appears to have secured an advantage heading into a crucial extraordinary shareholders meeting on Wednesday, after major proxy advisers threw their support behind the board-nominated candidate for a key audit committee seat and a court rejected a bid by MBK Partners and Young Poong to curb the voting rights held by Chair Choi Yun-birm and related parties.

The vote is the latest flashpoint in a control battle that has run since 2024, when private equity firm MBK Partners allied with Korea Zinc’s founding-family rival Young Poong to challenge the leadership of Chair Choi Yun-birm, triggering an unprecedented wave of tender offers and proxy fights for one of Korea’s most prominent industrial companies. Korea Zinc, the world’s largest zinc smelter, sits at the center of global supply chains for critical minerals used in batteries, semiconductors and steelmaking, which has heightened investor attention on how the dispute is resolved.

The meeting, to be held at the Mondrian Seoul Itaewon in Yongsan-gu, Seoul, will elect four independent directors plus one independent director who will also serve on the audit committee. The four regular independent director seats are expected to be split evenly between the two rival camps, with Korea Zinc’s board and the MBK–Young Poong alliance each fielding two candidates.

That dynamic has placed the spotlight firmly on the separately elected audit committee seat, for which the two sides have nominated competing candidates. The audit committee holds particular weight in Korean corporate governance because it oversees financial reporting, internal controls and related-party transactions — a sensitive area in a contest where both sides have traded accusations over governance and strategy.

Eight of nine major domestic and international proxy advisory firms — including the global advisers ISS and Glass Lewis — have recommended that shareholders vote for Baek In-gyu, the candidate put forward by Korea Zinc’s board, according to industry sources. Most of the same advisers recommended voting against Park Yoo-kyung, the candidate backed by MBK and Young Poong.

The advisers pointed to Baek’s accounting and auditing credentials, noting his qualification as a certified public accountant in both Korea and the United States and his extensive experience at accounting firms. His background in auditing and financial advisory services was seen as especially relevant given Korea Zinc’s large-scale investments and business expansion.

The National Pension Service, which holds a 5.44 percent stake in Korea Zinc, said Monday that it would vote in favor of Baek. Unlike most proxy advisers, however, the pension fund also said it would support Park. As Korea’s largest institutional investor, the pension fund’s voting stance is closely watched as a bellwether for other domestic institutions.

The outcome may hinge on Korea’s so-called 3 percent rule, which restricts the voting power of controlling shareholders and related parties in audit committee elections. Under the Commercial Act, the voting rights of a controlling shareholder and its related parties are capped at an aggregate 3 percent in such votes, preventing MBK and Young Poong from exercising their full combined stake.

Choi’s side faces restrictions as well, since Young Poong and Korea Zinc are still classified as part of the same corporate group, bringing related parties on the management side under the cap too. The rule amplifies the influence of institutional and minority shareholders, making proxy advisers’ recommendations and major investors’ voting decisions especially consequential for the result.

The incumbent management received a further boost when a court rejected injunction requests filed by MBK and Young Poong seeking to restrict the voting rights held by Choi and related parties.

Korea Zinc’s board currently comprises nine directors nominated or backed by the incumbent management and five nominated by MBK and Young Poong. If each side wins two of the four independent director seats, as expected, the 18-member board would consist of 11 directors nominated or backed by incumbent management and seven nominated by the MBK–Young Poong side. Baek’s election would expand the board to 19 members.

Although Baek was nominated by Korea Zinc’s board, his role as an independent director and audit committee member means his election should not necessarily be read as handing management an additional aligned vote. Even so, winning the board-nominated candidate the audit committee seat would mark a significant governance victory for the incumbent management in its prolonged control battle with MBK and Young Poong, while preserving its numerical advantage on the board.

Greater board stability could also help Korea Zinc advance major long-term projects, including Project Crucible, its planned integrated smelter in the United States, alongside its resource-recycling businesses. Those investments are part of the company’s strategy to diversify beyond traditional smelting into battery materials and secondary resources — a shift that has been a point of contention with MBK and Young Poong, which have questioned the pace and scope of the expansion. Whichever side prevails on Wednesday, further shareholder votes or legal challenges remain possible in the dispute.

“With most proxy advisers supporting Baek, Korea Zinc is expected to have an advantage in the audit committee vote,” an industry official said. “The incumbent management has also demonstrated its operating performance, including record first-half results, which could influence institutional and minority shareholders.”