MBK Partners Faces Allegations of Misusing Confidential Korea Zinc Data in Hostile Takeover Bid

A recent report by a local media outlet and online broadcast has brought to light serious allegations that MBK Partners may have misused confidential business data obtained from Korea Zinc (KRX:010130) during a prior investment evaluation process. The claims suggest that MBK may have leveraged sensitive information shared under a Non-Disclosure Agreement (NDA) to orchestrate its current hostile takeover attempt in collaboration with Young Poong. These accusations raise significant concerns about ethical practices in the private equity sector and the integrity of MBK’s acquisition strategy.

According to the report, in 2022, MBK Partners was reportedly considered as a potential financial partner for Korea Zinc’s strategic growth initiative, the "Troika Drive." During this period, MBK received detailed confidential documents related to Korea Zinc’s overseas business plans. Both parties signed an NDA explicitly prohibiting the disclosure or misuse of the information as well as any actions that could influence Korea Zinc’s governance.

While MBK ultimately did not pursue the investment, the NDA expired in May 2024—just a few months before MBK partnered with Youn Poong to launch a hostile takeover bid for Korea Zinc in September. Industry insiders question whether MBK used the confidential data to inform its acquisition strategy, a move that would represent a significant breach of trust.

Concerns have been further fueled by Young Poong advisor Jang Hyung-jin in a prior interview. Jang disclosed that discussions with MBK began as Young Poong’s management expressed the need to devise strategies in response to Korea Zinc’s partnership with Hanwha and Hyundai Motor Group. Reports suggest that negotiations for a governance cooperation agreement may have begun before the NDA expired.

Central to the controversy is whether MBK utilized the confidential data to formulate its acquisition plans. While the exact use of the information remains uncertain, industry sources point out that the materials provided by Korea Zinc contained detailed insights into its future business strategies. Notably, MBK and Young Poong have repeatedly criticized Korea Zinc’s investments in new business ventures, raising suspicions about potential links between the shared data and the current takeover effort.

An industry expert noted, “If these allegations are substantiated, MBK’s claims of pursuing governance improvement would lose significant credibility. The misuse of critical business data obtained under the guise of investment evaluation to launch a hostile acquisition would send shockwaves through the corporate world.”

The allegations have sparked outrage in the industry, with stakeholders questioning the ethical implications of MBK’s actions. Korea Zinc declined to comment on the specifics but stated “If these allegations are true, it would represent a serious breach of trust and severely undermine confidence in the market.” MBK Partners, for its part, dismissed the claims, asserting, “Discussing matters related to NDAs is itself illegal.”

As the situation unfolds, these allegations cast a shadow over MBK’s hostile takeover bid and raise broader questions about ethical standards in private and corporate acquisitions. The implications of this case could have far-reaching consequences for governance practices and trust in global M&A activities.

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