Hanmi Pharm Group's 'Sibling Rivalry' Emerges... Will the National Pension Service Become the Casting Vote?

Owner's eldest son: "Integration clearly involves legal risks," hints at joint action with younger son
Opposition to OCI Group integration and eldest daughter's succession formalization
National Pension Service holds 6.76% stake as 4th largest shareholder... potential casting vote

The eldest son of the late Lim Sung-ki, founder of Hanmi Pharm, Lim Jong-yoon, chairman of the Cori Group, has publicly opposed the integration between Hanmi Pharm Group and OCI Group, showing signs of escalating into a 'siblings' conflict.' In an interview with the media on the 15th, Chairman Lim stated, "I plan to secure shares by partnering with a private equity fund (PEF)" and "The integration clearly has legal issues," expressing his opposition. He also hinted at an alliance with his younger brother, Lim Jong-hoon, president of Hanmi Pharm. Accordingly, if the management rights dispute becomes a reality, attention will focus on the actions of the National Pension Service, a major shareholder of Hanmi Science (the holding company of Hanmi Pharm Group).

Earlier, on the 12th, Hanmi Pharm Group and OCI Group exchanged shares between Hanmi Science and OCI Holdings (the holding company of OCI). OCI Holdings acquired 27.03% of Hanmi Science's shares, while Lim Joo-hyun, president of Hanmi Pharm, acquired 10.4% of OCI Holdings. Immediately after the integration announcement, Chairman Lim opposed it through his X (formerly Twitter) account, stating, "I have never received any form of notice, information, or materials from the Hanmi side or the family regarding the announcement by Hanmi Science and OCI." This was a public move to block the fact that Lim Joo-hyun, the eldest daughter of founder Lim Sung-ki, has effectively been established as the successor of Hanmi Pharm Group.

National Pension Service may emerge as the 'casting vote'

After the share exchange between the two companies, the largest shareholder of Hanmi Science is OCI Holdings (27.03%). Even combining the shares of Chairman Lim Jong-yoon (11.12%) and President Lim Jong-hoon (6.59%) amounts to only 17.71%, which is quite a difference. However, if Shin Dong-guk, chairman of Hanyang Precision, who was especially close to founder Lim Sung-ki during his lifetime, sides with the 'siblings,' the total would be 28.83%, making it roughly equal. Excluding them, the shareholder with the largest stake is the National Pension Service (6.76%). It holds a level of shares that could serve as a 'casting vote.'

The 2020 management rights dispute at Hanjin KAL (the holding company of Hanjin Group) was also called a 'siblings' conflict.' It was a dispute over management rights between the eldest son of the owner family, Cho Won-tae, chairman of Hanjin Group, and the eldest daughter, Cho Hyun-ah, former vice president of Korean Air. Cho Hyun-ah formed a 'three-party alliance' with KCGI and Bando Construction and fiercely opposed Chairman Cho, but the National Pension Service, which held voting rights equivalent to 2.92% of Hanjin KAL shares, sided with Chairman Cho, securing over 40% of the voting rights and ending the 'siblings' conflict' with Chairman Cho's victory.

What process does the National Pension Service follow to 'participate in management'?

A National Pension Service official said, "The National Pension Service can participate in management strictly according to guidelines," adding, "The primary principle is that shareholder interests come first." If it intends to participate in management, it must first change its holding purpose to 'management participation.' Currently, the National Pension Service's holding purpose for Hanmi Science is 'simple investment.' Simple investment allows only passive participation, such as exercising voting rights on shareholders' meeting agendas. In contrast, management participation allows direct or indirect influence on company management.

Furthermore, the National Pension Fund Management Committee (Fund Committee), the highest decision-making body of the National Pension Service, decides whether to exercise shareholder rights for management participation and the scope of such exercise. The committee makes the final decision after review by the Stewardship Responsibility Committee. During the Hanjin Group management rights dispute, some members of the Fund Committee proposed active shareholder rights exercise regarding Korean Air and Hanjin KAL, and reflecting the Stewardship Responsibility Committee's opinion, the committee ultimately supported the current Hanjin Group chairman, Cho Won-tae.