This article was published on April 24, 2026, at 13:06 on Signal, the capital market compass.
Young Poong has filed a complaint with the Financial Supervisory Service (FSS), alleging that Korea Zinc's recent misstatement of its lenders while borrowing 541.1 billion won ($400 million) from Meritz Fire & Marine Insurance and others was not a simple mistake but a suspected "serious disclosure distortion."
According to the financial investment industry on the 24th, Young Poong submitted the complaint containing these contents to the FSS that day. An FSS official said, "We will review it according to standards and procedures." Under the Capital Markets Act, false entries or omissions of material matters in large-scale shareholding reports are subject to administrative fines.
According to the complaint obtained by The Seoul Economic Daily, Young Poong raised four suspicions: ▲ violation of the prohibition on personal credit extension by comprehensive financial investment business operators, ▲ circumvention of collective investment regulations and de facto use of a private equity investment structure, ▲ violation of financial-industrial separation rules and financial firms' intervention in industrial company governance, and ▲ false entries in the 5% report and distortion of material disclosures.
Young Poong pointed out that the counterparties for financing and collateral agreements listed in the "Large-Scale Shareholding Report" filed on the 14th of this month by Korea Zinc Chairman Choi Yun-birm and "P23 Partners," a special purpose company (SPC) of Meritz Securities, were likely misstated.
At the time, the report listed only Meritz Securities as the counterparty to the collateral agreement with Choi and the owner family. When controversy arose that this "constitutes credit extension by a comprehensive financial investment business operator to an individual," Korea Zinc on the 21st changed Meritz Securities from a lender to an "arranging financial institution" through a corrective disclosure. The actual lenders were corrected to include, in addition to Meritz Securities, two Meritz Financial affiliates — Meritz Fire & Marine Insurance and Meritz Capital — along with three others: Kwangju Bank, Jeonbuk Bank, and JB Woori Capital.
Regarding this, Young Poong stated, "The counterparty to a loan or collateral agreement is a key element in determining the substance and risk structure of a transaction, and constitutes a 'material matter' under the Capital Markets Act. Since the 'Large-Scale Shareholding Report' presumes the attachment of contracts, the possibility of incorrectly entering the counterparty is low." It added, "The fact that key items were subsequently changed is difficult to view as a simple error, and can be assessed as a serious disclosure distortion issue directly linked to market trust," requesting a thorough investigation into the truthfulness of the initial disclosure and the circumstances of the correction.
Young Poong also alleged that in the process of Chairman Choi and Meritz Securities acquiring Korea Zinc shares through the SPC, they violated regulations on personal credit extension by comprehensive financial investment business operators. It cited as grounds that the SPC is a "nominal company" with capital of only 120 billion won, and that Chairman Choi's family secured a call option to repurchase the Korea Zinc shares held by the SPC. Young Poong said, "It is a structure in which both profits and losses are borne by an individual (the Choi family), leaving considerable room to view it as indirect personal credit extension mediated by the SPC."
In addition, Young Poong raised the suspicion that although this transaction effectively constitutes a collective investment or private equity investment structure, it merely changed its outward appearance to an unregistered securitization SPC structure, which could be seen as circumventing regulations under the Capital Markets Act. Young Poong said there is a possibility of a "violation of financial-industrial separation rules," arguing that Meritz Securities effectively controls the SPC and, through it, may have intervened in Korea Zinc's governance structure.
