The inheritance tax for the late Professor Choi Jung-woon's Korea Zinc stake has been finalized at approximately 210.4 billion won, with the calculation period closing on the 27th. Professor Choi, uncle of Korea Zinc Chairman Choi Yun-beom, passed away in May, leaving a 1.51% stake (314,468 shares) valued at 421.7 billion won based on the average closing price of 1,340,951 won over the four-month period from March 27 to July 27. The substantial tax burden—equivalent to 70% of the stake's current market value at the previous day's closing price of 950,000 won—has raised questions about potential share sales or collateral restructuring ahead of Korea Zinc's September 9 shareholder meeting, where Chairman Choi's group and the MBK-Youngpoong alliance will compete for board seats.
Inheritance Tax Calculated at 210.4 Billion Won Based on Four-Month Average Price
According to investment banking industry sources on the 29th, the inheritance tax calculation period for Professor Choi's 1.51% Korea Zinc stake closed on the 27th. Under inheritance and gift tax law, the tax basis uses the average closing price over two months before and after the date of death (March 27 to July 27), resulting in a price of 1,340,951 won per share. The total inheritance value of Professor Choi's 314,468 shares is estimated at 421.7 billion won. The expected inheritance tax burden for the heirs is approximately 210.4 billion won, calculated using the maximum tax rate of 50% for inheritance values exceeding 3 billion won, minus the progressive deduction of 460 million won. Korea Zinc's share price fluctuated significantly during the calculation period, ranging from the 1.7 million won level to the 900,000 won level, resulting in the average price settling in the 1.3 million won range.
Heirs Face Tax Burden Equivalent to 70% of Current Stake Value
The tax burden has become particularly severe relative to current market value, with the heirs receiving a tax bill equivalent to 70% of the stake's value based on Korea Zinc's closing price of 950,000 won on the previous day (approximately 299 billion won). Inheritance procedures are also underway for the deceased's holdings in Youngpoong and KZ Precision. Legal experts predict the heirs will need to renew or terminate existing stock collateral agreements to secure the resources for the over 200 billion won inheritance tax payment. There is precedent from the inheritance process following the death of honorary Chairman Choi Chang-geol, when financial institution pledge rights were terminated and removed from collateral lists.
Chairman Choi Establishes PI121 Partners Limited Company on the 13th
Chairman Choi established PI121 Partners, a limited company with himself as sole director, on the 13th. Investment banking industry observers suggest Chairman Choi may have proactively created a vehicle for loan restructuring (refinancing) and collateral reorganization in anticipation of requests to release pledges on Professor Choi's shares. The company is reportedly unrelated to the Meritz-led lending syndicate with which Chairman Choi and the Choi family have existing stock collateral agreements. A tax attorney explained that "the gap between the current share price and the inheritance tax assessment amount is large," adding that "heirs may face pressure to request pledge release from existing lenders or sell portions of their holdings through block deals to provide national tax collateral or raise cash."
Korea Zinc Shareholder Meeting Set for September 9
Korea Zinc will hold an extraordinary shareholder meeting on September 9 to vote on the appointment of outside directors and separately elected audit committee members, with a proxy contest between the MBK-Youngpoong alliance and Chairman Choi's group. The meeting will elect a total of five members: four outside directors and one audit committee member. The ownership structure shows the MBK-Youngpoong alliance holding approximately 41.1% and Chairman Choi's family and friendly forces holding 37.9%.
FAQ
Q: What is the total inheritance tax burden for Professor Choi Jung-woon's Korea Zinc stake?
A: The inheritance tax for Professor Choi's 1.51% Korea Zinc stake (314,468 shares) is approximately 210.4 billion won, calculated based on an average closing price of 1,340,951 won over the four-month period from March 27 to July 27.
Q: When is Korea Zinc's shareholder meeting scheduled?
A: Korea Zinc will hold an extraordinary shareholder meeting on September 9 to vote on the appointment of outside directors and audit committee members, with the MBK-Youngpoong alliance holding approximately 41.1% and Chairman Choi's group holding 37.9%.
