 |
Youngpoong. (Photo courtesy of Youngpoong) |
[Alpha Biz= Kim Jisun] As annual general meetings approach, controversy surrounding Youngpoong’s Seokpo smelter is expected to become a key issue at shareholder meetings involving both Youngpoong and Korea Zinc, industry observers say.
According to industry sources on Monday, the two companies are likely to clash over management performance at AGMs scheduled for late next month. While Korea Zinc has posted strong results, Youngpoong recorded operating losses, raising questions over whether operational problems at the Seokpo smelter are a central factor behind Youngpoong’s deteriorating performance.
Youngpoong’s Seokpo smelter has increasingly come under scrutiny not only for weak business results but also for environmental controversies and escalating conflicts with local residents. Environmental groups, along with Democratic Party of Korea lawmaker Kang Deuk-gu, have filed a petition under the Special Procedures mechanism of the United Nations Human Rights Council, alleging environmental pollution linked to the smelter.
They argue that the long-term operation of the Seokpo facility has caused serious environmental contamination and industrial accidents, significantly affecting the health of workers and nearby residents. Investigations have found that the smelter discharged approximately 8,030 kilograms of cadmium—a toxic heavy metal—per year, prompting the South Korean government to impose a fine of KRW 28.1 billion in 2021.
Analyses have also indicated that cadmium concentration levels near the Seokpo smelter are as much as 45 times higher than those recorded around the former Janghang smelter. In July last year, residents in the Nakdong River basin who claim to have suffered damage from pollution linked to the Seokpo facility filed the first collective damages lawsuit against Youngpoong.
Even MBK Partners, which is pursuing a hostile merger and acquisition of Korea Zinc in partnership with Youngpoong, has acknowledged the seriousness of the environmental pollution issues surrounding the Seokpo smelter, according to industry sources.
The growing controversy is increasingly viewed as a social and governance issue that could further undermine confidence in Youngpoong’s management capabilities, particularly as the smelter’s operating performance continues to deteriorate.
Civic groups have called on the controlling Jang family to step forward and assume greater responsibility for management, arguing that accountability should not be obscured behind a professional management structure.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
