Hong Won-sik, chairman of Namyang Dairy Products, recently issued a public apology regarding the controversy caused by the announcement that the company's dairy product, Bulgari, has an effect in suppressing COVID-19. On the 4th, he announced his resignation as chairman after apologizing to the public at the main auditorium of Namyang Dairy Products headquarters on Dosan-daero, Gangnam-gu, Seoul. Photo by Hyunmin Kim kimhyun81@
[Asia Economy Reporter Seungjin Lee] Namyang Dairy Products, which faced criticism after announcing research results claiming that its dairy product Bulgari suppresses COVID-19, has decided to form an emergency response committee to reform its management.
Namyang Dairy Products announced this decision on the 10th through a press release, stating that an emergency board meeting was convened on the 7th.
The emergency response committee will devise management reform measures and request the major shareholder to improve the governance structure by separating ownership and management. The chairman of the emergency response committee will be Jeong Jaeyeon, the head of Namyang Dairy Products' Sejong factory, but the detailed committee composition has not yet been finalized.
As of the end of last year, the largest shareholder of Namyang Dairy Products is Chairman Hong Won-sik, holding 51.68% of the shares, and when including shares held by Chairman Hong’s wife and brother, the family’s total reaches 53.08%. CEO Lee Kwang-beom, who tendered his resignation on the 3rd, plans to maintain his position until the next management team is appointed.
Earlier, on the 4th, Chairman Hong Won-sik held a public apology press conference at Namyang Dairy Products' headquarters in Nonhyeon-dong, Gangnam-gu, Seoul, regarding the Bulgari incident. At this event, he announced his intention to resign as chairman and not to pass on management rights to his children. Last month, his eldest son, Executive Director Hong Won-sik, was dismissed from his position amid allegations of embezzling company funds.
On the 13th of last month, Namyang Dairy Products sparked public outrage by presenting research results claiming that Bulgari suppresses the COVID-19 virus at the "Symposium on the Development of Antiviral Foods in the COVID Era."
In response, the Ministry of Food and Drug Safety reported that only one of the seven Bulgari products underwent cell testing, yet the company implied that all products had antiviral effects. On the 15th, the Ministry filed a complaint against Namyang Dairy Products with the police for violating the Food Labeling and Advertising Act. Consequently, a police search and seizure was conducted on the 30th of last month.
The Sejong city government also gave prior notice of a two-month business suspension administrative sanction to Namyang Dairy Products' Sejong factory, where 40% of the company’s products are produced. The final administrative sanction will be decided after a hearing scheduled for the 24th of next month.
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