A takeover battle over Korea Zinc is adding pressure on Seoul to pass legislative reforms to ensure better protections for all investors in a country with a stock market dominated by family-run conglomerates.

Korea Zinc Chairman Yun B. Choi, a grandson of a co-founder, last week agreed to scrap a controversial plan to issue new shares in the world's largest zinc refiner to help fend off a takeover attempt from the co-founding family's Youngpoong Corp. and its partner, private equity group MBK Partners.

The share issue plan had infuriated many investors as two days before it was announced, Korea Zinc finalized a buyback at a 25% higher price.