Korea Zinc Chairman Choi Yun-beom, left, and Young Poong Chairman Chang Hyung-jin / Courtesy of each company

By Park Jae-hyuk

The grandson of Korea Zinc founder Choi Ki-ho, who was promoted to chairman this week, is expected to accelerate his efforts for the general non-ferrous metal smelter's independence from its largest shareholder, Young Poong, which is under the control of the family members of another of Korea Zinc's founders, Chang Byung-hee, according to industry officials, Wednesday.

The smelting company said Tuesday that its board members appointed Choi Yun-beom as the chairman to replace his uncle, Choi Chang-keun, who became the honorary chairman.

"The young leader in his 40s, who is also the founder's grandson, will lead the next 50 years of Korea Zinc, which was founded in 1974," the company said in a press release.

The new chairman is said to be intent on separating Korea Zinc from Young Poong.

Korea Zinc's recent deals to swap its treasury shares with Hanwha Corp. and LG Chem last month were therefore interpreted as part of the Choi family's efforts to secure a larger amount of friendly shares, although both Young Poong and Korea Zinc dismissed such speculation.

When Korea Zinc swapped its treasury shares with the two conglomerates, the smelter said the deals were intended to attract investments in its future growth engines, such as renewable energies, hydrogen, battery materials and recycling.

Following the treasury share swap deals, however, Choi's family members were able to narrow the gap with the Chang family in their stake in Korea Zinc to 3.5 percent from 16 percent.

As a result, domestic securities analysts have regarded the deals as the Choi family's attempts to look for "white knights" to defend them against Chang family-led Young Poong, which had purchased a large amount of Korea Zinc shares in August.

"The share swap deals seem to be showing that LG Chem and Hanwha Corp. support Choi family-led Korea Zinc as their long-term business partner," eBest Investment & Securities analyst Ahn Hoe-soo said.

Young Poong Chairman Chang Hyung-jin, who serves as a director of Korea Zinc, however, reportedly voted for the smelter's treasury share swap deals and the appointment of the new chairman, both of which were considered unfavorable to his family.

Some observers therefore expect that the two families may separate peacefully.

Given that Korea Zinc is virtually the only profit-making affiliate of Young Poong Group, however, there remains the possibility of conflict between the two families over the control of the smelter, which has been more lucrative thanks to its production of battery materials.

"Korea Zinc's independence depends on Young Poong and Chang," NH Investment & Securities analyst Byun Jong-man said. "Considering Young Poong and Chang acquired an additional stake in Korea Zinc recently, it is difficult to anticipate the separation."