[Asia Economy Reporter Kim Daehyun] Hong Wonsik, chairman of Namyang Dairy Products (72), and Han Sangwon, president of Hannam Company (Hannam Co) (51), who are parties to the 'Namyang Dairy Products M&A lawsuit,' appeared in court as witnesses and engaged in a battle over the truth. They each claimed different facts even about the same situation they shared.
At 2 p.m. on the 21st, the Civil Division 30 of the Seoul Central District Court (Chief Judge Jung Chanwoo) held the 7th hearing of the stock transfer lawsuit filed by Hannam Co against the Hong family. The witness examinations of the two lasted two hours each.
On that day, Chairman Hong argued that the background for the suspension of the sale was that the prioritized conditions he emphasized, such as the spin-off of Baekmidang and the food service business division, which were led by his wife, advisor Lee Woonkyung, and the guarantee of courtesy to his two sons who are executives of Namyang Dairy Products and other family members, were not met. He said, "As someone selling the company due to unforeseen circumstances, I thought it was essential to uphold these conditions as a husband and father."
He also mentioned, "I wanted to talk personally and humanly with President Han (on July 20 last year), but since lawyers were present at Han's request, I couldn't talk," adding, "It was so formal that I felt resentful." Nevertheless, he said he trusted President Han and believed that the promise would eventually be fulfilled.
However, President Han rebutted that Chairman Hong only focused on raising the purchase price per share and did not emphasize conditions such as Baekmidang from the beginning. When Hong's legal representative said, "Since the family business was suddenly being sold, it was a premise to secure all conditions," President Han responded, "It is not a family business but a 'listed company.' I never said I would take care of the family. Isn't receiving 310 billion won from the share sale taking care of the family?"
The two sides also gave conflicting statements about their first meeting on May 11 last year to discuss the M&A. Chairman Hong claimed, "We met on the premise of conditions such as the spin-off of Baekmidang," adding, "Otherwise, there would have been no reason to meet Hannam Co." President Han said, "On that day, I said, 'If you want, we can consider separating the food service division for acquisition,' but there was no response," and "the next day, I was informed through Hong's side that 'Chairman Hong is not interested in Baekmidang and does not want it,'" he claimed. He also added, "In my lifetime of M&A-related work, I have never made verbal promises or failed to reflect contract terms in writing. There has never been a problem."
Chairman Hong appointed a lawyer from Kim & Chang as his M&A legal representative, but he repeatedly pointed out that Hannam Co also appointed another lawyer from Kim & Chang, causing a conflict of interest. He explained that he intended to file a criminal complaint against the Kim & Chang lawyer but postponed it due to advice to wait for the civil lawsuit results.
On the other hand, President Han stated that it is common for one law firm to represent both parties in an M&A, so there is no problem. When asked by Chairman Hong's side whether they received consent forms for dual representation from Kim & Chang, he said, "In 28 years, I have never received consent forms related to dual representation," and added that Hannam Co was not well aware of the process of appointing Kim & Chang lawyers. Chairman Hong's side also said they were not informed in advance about appointing Kim & Chang.
The court set the next hearing date for the 5th of next month and concluded the witness examination that day.
Earlier, the Hong family signed a stock sales contract on May 27 last year to sell 53.08% of shares to Hannam Co for about 310.7 billion won, but on September 1 of the same year, Chairman Hong notified the contract termination, claiming that Hannam Company did not fulfill the preconditions for the transaction. Subsequently, Hannam Co filed three injunction applications, all of which were accepted by the court.
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