Korea Zinc's extraordinary shareholders' meeting takes place at Grand Hyatt Seoul, Jan. 23. Joint Press Corps

Young Poong, which joined forces with private equity firm MBK Partners to secure control of Korea Zinc, has filed an injunction request with the Seoul Central District Court to suspend the seven board members recommended by the zinc smelter. The request cites significant procedural flaws in their appointments, the Young Poong-MBK alliance said Tuesday.

The injunction, filed on Monday, seeks to prevent the seven members from performing their duties as outside directors of Korea Zinc until the court decides whether to nullify or invalidate the resolutions passed at the firm's extraordinary shareholders' meeting on Jan. 23.

"These directors were unlawfully appointed after Korea Zinc Chairman Choi Yun-beom, facing the risk of losing control, unilaterally and illegally restricted Young Poong's voting rights, which exceed 30 percent of the shares present at the meeting," an MBK official said. "Allowing them to participate in board resolutions would delay Korea Zinc's governance reform, ultimately harming the company, its shareholders and investors."

The move came as Choi, on the eve of the shareholders' meeting, established a new cross-shareholding structure within the company to defend his control. Young Poong Precision, controlled by Choi, sold 10.33 percent of Young Poong shares to Sun Metal Corporation (SMC), a wholly owned Australian subsidiary of Korea Zinc.

In so doing, Choi effectively nullified Young Poong's voting rights, leveraging the restrictions on cross-shareholding voting rights under the Commercial Act. As a result, Choi's side was able to pass resolutions, including the introduction of the cumulative voting system, which he had pushed for to block the alliance's recommended candidates from joining the board.

The MBK alliance claimed that since SMC is a limited liability company and a foreign entity, such restrictions under domestic law do not apply. It filed an injunction request with the Seoul court on Friday to suspend the validity of the resolutions passed at the meeting.

Separately, Young Poong also filed a criminal complaint with the prosecution against Choi and current and former directors of SMC on charges of breach of trust and violations of the Fair Trade Act.