Korea Zinc Chairman Choi Yun-beom bows in apology at an urgent press conference held in Seoul on Wednesday. Earlier in the day, the company's board agreed to withdraw its capital issue plan announced last month. (Im Se-jun/The Korea Herald)

Korea Zinc Chairman Choi Yun-beom on Wednesday apologized to the public, canceling the company’s hastily-made capital increase plan that sent its shares on a roller-coaster ride in recent weeks.

“Though the capital raise was planned to strengthen a more diverse and independent shareholder base consisting of general investors, I offer my sincere apology as the plan, drawn up in urgent and desperate circumstances, was inconsiderate of existing shareholders,” Choi said at a press conference held in central Seoul.

On Oct. 30, Korea Zinc announced it would execute a 2.5 trillion won ($1.79 billion) paid-in capital increase, a move assumed to be an attempt to overcome the lagging in a power struggle with private equity giant MBK Partners and friend-turned-foe Young Poong.

The watchdog Financial Supervisory Service pressured the smelter to correct the plan, citing a lack of explanation.

“With a decrease in the number of circulating shares following tender offers (launched separately by Korea Zinc and the MBK-Young Poong coalition), the company’s share price remained volatile. Korea Zinc attempted to form a wide and objective shareholder base to resolve all issues,” Choi said.

Following the closing of all tender offers, the shares of Korea Zinc jumped almost 30 percent on Oct. 24. It closed at 1.13 million won, hitting the upper circuit limit. A few days later, Korea Zinc announced the capital raise plan and the share price fell to its lower circuit limit at 1.08 million won on Oct. 30. On Wednesday, the shares ended trading at 981,000 won.

With an apology, Choi offered to leave his post as the chief of the board.

“In coming days, I will step down from the chief of the director board, and remain as just a director. This is to strengthen the independence of the board, which would ensure a healthier governance for the company’s management,” Choi said.

“The change needs to be confirmed through a shareholders meeting, but in my perspective, even the MBK-Young Poong alliance is likely to agree to this.”

Choi further suggested an independent director on the board can become its chief and to include a foreign national on the board as an independent director to better communicate with foreign shareholders.

On Monday, the MBK-Young Poong alliance announced it has secured an additional stake of 1.36 percent in Korea Zinc through floor trading. The addition brings the stake ownership to 39.83 percent, outrunning the 35 percent stake assumed to be in control of Choi. In terms of shares with voting rights, MBK-Young Poong has its hands on over 45 percent of shares.

Though more market watchers are suggesting the MBK-Young Poong alliance has seized the victory in the power struggle, Choi remained confident that he stands a chance.

"After conducting many meetings in recent days, I have the confirmation that we would not lose in the coming shareholder meetings if we could earn back the trust of Korea Zinc shareholders."