Watchdog orders thorough inspection of Korea Zinc for any legal violation

Seoul: The head of the financial watchdog on Tuesday called for a thorough inspection of Korea Zinc, and those seeking to take over the firm for any legal violations in their attempts to take over or defend the company.

Lee Bok-hyun, chief of the Financial Supervisory Service (FSS), also vowed to take “stern measures” against anyone who may have wronged.

The call comes amid a move by private equity firm MBK Partners and Young Poong Corp, the largest shareholder of Korea Zinc, to take control of the world’s biggest zinc smelter, reports Yonhap news agency.

The two had initially offered to purchase the company’s shares at a price of 750,000 won ($556.83) per share, but later raised their offer price to 830,000 won after Korea Zinc Chairman Choi Yun-beom said the company would repurchase its own shares and cancel them at the higher price.

Lee ordered an immediate review of the developments around the company for any illegal transactions in a weekly meeting with senior FSS officials.

He noted rumours of a plan by Korea Zinc to repurchase its own shares at a price higher than the one offered by the bidders or that the amount of shares to be repurchased and cancelled may have been inflated could have had an adverse effect on prices had they been spread intentionally by either side.

“The government will take stern measures against anyone under due regulations should any illegal acts aimed at hindering the process be confirmed,” Lee was quoted as telling the meeting.

The FSS chief also called for “active efforts” to protect other consumers, the FSS said in a press statement.

–IANS