Wedoany.com Report-Nov 20, Korea Zinc Co.’s chairman is working to regain shareholders’ trust after being forced to scrap a $1.8 billion share sale last week, a setback in the bitter battle for control with the company’s top shareholder that he described as his “one real mistake.”

Yun B. Choi, who will also stand down as chairman of the board as a result, said steps include meetings with investors, reinforcing the board with the addition of a foreign director and independent chairman, strengthening the voices of minority shareholders and introducing a quarterly dividend.

“We have said sorry, and we will continue to say sorry as many times as necessary,” said Choi, 49, speaking to Bloomberg TV at Korea Zinc’s Seoul headquarters. Choi will continue as the company chief executive.

“We were so driven by our need to fend off this hostile takeover attempt, we believed with such conviction that it was good for the company, good for the shareholders and good for the employees, that we had tunnel vision.”

The world’s largest zinc smelter has been caught for months in a battle for control that has pitted the company’s two largest shareholders against each other. Succession fights are not uncommon in Korea, where family-owned conglomerates play an outsized role — but few involve large private equity players, dramatic stock moves and ultimately attract the attention of the financial watchdog. 

Choi, who said the approach came with “no warning”, responded by tapping private equity firm Bain Capital and launching a share buyback that would ultimately give his group more than 35% ownership.

Speaking on Tuesday, he dismissed MBKP’s comments on Korea Zinc’s governance shortcomings and said the board was “robust”. He added, without naming candidates, that there was already a shortlist for the new chairman of the board.

Choi, mounting a defense of the company’s performance and management, said a sizeable body of independent shareholders would support the current leadership — but added he was open to holding discussions with MBKP and Young Poong.

“I am willing to talk now, I am willing to talk in the future. I am not interested in being a dictator, or any of the things they claim,” Choi said. “If they have good ideas, I am willing to hear them.”

MBKP has questioned Korea Zinc’s rising debt burden, but Choi said leverage was required for growth and remained under control, while the company had other funding options. He said Korea Zinc has been getting “numerous calls of interest” from investors about its Australian renewable energy unit Ark Energy and the company could consider a pre-IPO investment. He cautioned that there were no concrete deals at this stage. 

The two sides diverge on the fundamentals of Korea Zinc’s future direction. While the company has for decades focused mainly on its non-ferrous metals refining business, Choi, who became chairman two years ago, is betting the company’s future on green materials, investing heavily in clean power, electric vehicle batteries and recycling. The rival faction has instead focused on strong dividends.

That green “troika”, he said, brought opportunities as the US and other nations sought non-Chinese producers of key metals — including under President-elect Donald Trump. Including affiliates, the company accounts for 12% of the world’s zinc produced outside of China, 5% of its lead and around 9% of its silver, according to Bloomberg analysis using data from consultancy CRU Group.

“He will be tougher on China,” Choi said, referring to Trump. “The US or Europe, if they are going out into the world and looking for nickel that is produced by a non-Chinese party, they’re going to have a a very, very short list. And we’re going to be top of that list.”

Korea Zinc was founded by two friends who fled North Korea and is still held by the Chang clan, who control top investor Young Poong, and the Choi family. The families had begun in business together in 1949, eventually setting up Korea Zinc in 1974. 

Choi, who studied at Amherst and Columbia, is the co-founder’s grandson. 

--With assistance from Justin Solomon, Shinhye Kang, Filipe Pacheco, Rika Yoshida and Emily Yamamoto.