Im Jong-yoon and Jong-hoon Brothers Take Control of Hanmi Pharmaceutical Group Management (Update)

28th Hanmi Science Holding Company Shareholders Meeting
Appointment of 5 Directors Approved for Lim Jong-yoon and Jong-hoon Factions
Brothers 5 vs Mother and Daughter 4 Secures Holding Company Board Seats

The Im Jong-yoon and Jong-hoon brothers succeeded in taking control of the board of directors of Hanmi Science, the holding company, bringing to a close the management dispute within the Hanmi Pharmaceutical Group that had been ongoing since January. The brothers' side is expected to immediately nullify the board decisions related to the Hanmi-OCI merger, which sparked the conflict.

Lim Jong-yoon, President of Hanmi Pharm, and Lim Jong-hoon, CEO of Hanmi Fine Chemical, are attending the '51st Hanmi Science Annual General Meeting' held on the 28th at Syntex in Hwaseong-si, Gyeonggi-do. Photo by Kang Jin-hyung aymsdream@

At the general shareholders' meeting that day, 88.0% of the voting shares out of 67,763,663 shares with voting rights as of the end of last year were present. Including minority shareholders as well as major shareholders, a total of 2,160 shareholders participated in the vote. On-site, the meeting started at 12:28 PM, about three and a half hours later than the originally scheduled time of 9 AM, due to reasons such as verifying proxy forms. However, even after that, it took several rounds of vote counting and result compilation following the first recess around 1 PM, and the final results were announced only at exactly 3 PM, more than two hours later.

The key issue at the meeting was the appointment of new directors. Currently, the Hanmi Science board consisted of only four members from the mother-daughter faction, including Chairwoman Song Young-sook. The brothers proposed shareholder motions to appoint five directors, including themselves, Kwon Kyu-chan, Bae Bo-kyung, and Sa Bong-gwan, aiming to control the board 5 to 4 and overturn the merger decision. In response, the mother-daughter faction proposed appointing six new directors, including Im Ju-hyun, president of Hanmi Pharmaceutical, OCI Group Chairman Lee Woo-hyun, and Choi In-young, Park Kyung-jin, Seo Jeong-mo, and Kim Ha-il.

However, the brothers' side succeeded in gathering shares representing a majority of voting rights with around 52% of the votes on most proposals, resulting in all their proposed directors entering the board and ultimately taking control of the Hanmi Science board.

Unlike the brothers who were physically present, OCI Chairman Lee, the only major figure from the mother-daughter faction to appear, left the meeting hall around 2:25 PM before the final results were tallied, leading to speculation that defeat was imminent. Chairwoman Song was expected to be absent due to known health issues, and with President Im Ju-hyun also not appearing, there were predictions that the outcome was already decided.

The brothers' side, having previously claimed that "this merger decision is based solely on the Hanmi Science board's decision," is expected to convene the board soon to overturn all merger decisions between the two groups.

The "51st Hanmi Science Regular Shareholders' Meeting" held on the 28th at Syntex in Hwaseong-si, Gyeonggi-do, is delayed past the scheduled start time of 9 a.m. due to the time taken to count the onsite proxy votes. Photo by Jinhyung Kang aymsdream@

However, despite the brothers' victory, concerns remain over funding issues. This conflict is ultimately analyzed as a dispute over the 540 billion KRW inheritance tax imposed after the sudden passing of founder Im Seong-gi in 2020. The brothers have also opposed the merger, stating that "the purpose of this merger is the pursuit of private interests to resolve the inheritance tax funding."

There are ongoing concerns that a large amount of Hanmi Science shares could flood the market at any time due to the inheritance tax issue, and if this is not resolved, stable management by the brothers will be impossible. The mother-daughter faction has confidently claimed that selling old shares to OCI Holdings could resolve the inheritance tax in one go, but the brothers have not clearly presented the source of funds to solve the tax issue. President Im Jong-yoon previously explained, "There are talks that we have no funds, but you have to look at net assets," adding, "We are personally handling the tax issue well."