Korea Zinc Chairman Choi Yun-beom speaks during a press conference in Seoul, Nov. 13, 2024. Korea Times photo by Choi Joo-yeon

The National Pension Service (NPS) on Friday decided to support two key proposals by Korea Zinc, including the adoption of a cumulative voting system, amid a deepening control battle with its biggest shareholder, Young Poong.

The decision was made at the NPS' trustee commission meeting to discuss issues for Korea Zinc's upcoming ad hoc shareholders meeting next week.

The NPS, which holds a 4.51 percent stake in Korea Zinc, agreed to back proposals to adopt a cumulative voting system for director elections and cap the total board size at 19 members.

This move is expected to bolster the position of Korea Zinc Chairman Choi Yun-beom, who is facing a takeover attempt by Young Poong and private equity firm MBK Partners.

Choi and related parties own about 34 percent of Korea Zinc, while the Young Poong camp controls 40.97 percent.

The cumulative voting system would allow Choi's camp and other minority shareholders to pool their votes and appoint some new directors, making it harder for Young Poong-MBK to take control of the board.

The proposed 19-member cap on the board is also seen as favorable to Choi as it could disrupt Young Poong-MBK's plan to introduce 14 new candidates to secure a majority.

The board is currently composed of 12 directors, with Korea Zinc proposing an additional seven members and the Young Poong camp pushing for 14.

The management tussle at Korea Zinc was initiated in September when the MBK-Young Poong alliance launched a tender offer for an additional stake in the smelter.

In response, Korea Zinc, with the support of U.S.-based Bain Capital, conducted a massive stock buyback. (Yonhap)