SEOUL (Reuters) - Korea Zinc said on Monday it has secured 9.85% of the company's shares in a $1.5 billion buyback that it launched to block shareholders from selling their stakes to its top investor Young Poong and private equity firm MBK.

Bain Capital, which backs Korea Zinc's current leaders, separately secured a 1.41% stake in the company, the world's biggest zinc smelter said in a regulatory filing.

Run by the Choi family, Korea Zinc has been in a bitter fight for control of the $18 billion zinc empire with the co-founding Chang family, whose conglomerate Young Poong made an initial joint offer with MBK in September.

The latest transactions suggest the overall backing Korea Zinc's management has won so far is smaller than the stake held by MBK and Young Poong. That raised investor expectations for a prolonged takeover battle, driving Korea Zinc shares to record highs on Monday.

MBK and Young Poong together own about 38.5% of Korea Zinc.

Before the buyback, Korea Zinc's Choi family had the backing of shareholders that owned up to 36% of the company, including strategic partners such as Hyundai Motor Group, according to analysts.

Korea Zinc said on Monday it had spent 2.07 trillion won ($1.5 billion) on the buyback and would eventually cancel all of its newly acquired shares to raise shareholder value.

Cancellation of the shares means the Chois' stake will not increase relative to its rival.

Neither side has a majority stake in the case of a proxy fight.

Shares in Korea Zinc jumped as much as 11.7% on Monday to a record high of 1.4 million won, 57% above its buyback price of 890,000 won, before ending the session up 3.8% at a record close as the number of shares available to trade have shrunk due to tender offers from both sides.

Shares in Young Poong closed up 7.45%.

MBK on Monday nominated 14 new directors for the firm, which currently has 13 board members, and called for Korea Zinc to hold an extraordinary shareholder meeting, as flagged to Reuters by a partner in the fund last week.

The fund also said it would propose a new system to separate management from the board in a bid to improve governance, adding Korea Zinc's latest share buyback had caused a severe financial hit to the company.

Various shareholders widely viewed as sympathetic to the Chois, such as Hyundai Motor ( HYMTF ), Hanwha Group and LG Chem, have yet to publicly declare their stance.

South Korea's National Pension Service, the world's third-largest pension fund which held a 7.83% stake in Korea Zinc at end-June, is expected to be a key casting vote. It has yet to disclose its stance.

($1 = 1,384.1300 won)