[Column] The Battle Won by Hanmi Pharm Through Communication with Minority Shareholders

Lee Chun-hee, Bio, SME and Venture Business Department Reporter

"The number of shares in favor of appointing Director Im Jong-yoon is 31.14 million..." "Wow!"

At 3:05 PM on the 28th, before the chairman of the Hanmi Science shareholders' meeting could finish speaking, small shareholders filling the 510-pyeong convention hall of the Lavideol Hotel in Hwaseong, Gyeonggi Province, erupted in cheers. Applause and shouts nearly blew out the speakers in the press room. It was the moment when the two-month-long management dispute within the Hanmi Pharm Group ended in victory for the Im brothers, Jong-yoon and Jong-hoon, backed by small shareholders.

The Hanmi Science shareholders' meeting was different from typical domestic shareholders' meetings that start on time and swiftly pass agenda items. With a large number of small shareholders expressing their intention to participate, proxy votes poured in from shareholders unable to attend due to distance and time constraints. The verification of proxy votes, which began at 5 AM, continued past noon. The meeting, originally scheduled to start at 9 AM, was delayed by three and a half hours. Among the small shareholders gathered, over 80% supported the brothers. Although the battle for votes among major shareholders was won by Chairman Song Young-sook and Vice Chairman Im Joo-hyun, mother and daughter, backed by the National Pension Service, the final victory went to the brothers who secured the small shareholders' votes.

What ultimately decided the outcome that day was communication. Unlike the brothers who arrived early at the meeting venue, the mother and daughter never showed their faces until the end. Small shareholders seated at the meeting exchanged comments calling them "irresponsible."

On the 28th, the venue for the 51st Annual General Meeting of Shareholders of Hanmi Science was set up at Syntex in Hwaseong-si, Gyeonggi-do. Photo by Jinhyung Kang aymsdream@

Since the announcement of the Hanmi Pharm and OCI merger on January 12, the mother and daughter did not communicate with small shareholders. Despite criticism that the merger was effectively a company sale to resolve inheritance tax issues, their only media appearance was a single, superficial group interview. The investor relations (IR) session was held only shortly before the shareholders' meeting.

At around the same time, LegoChem Bio, which announced a merger with Orion, took a different approach. LegoChem also faced backlash and concerns from small shareholders. CEO Kim Yong-joo personally attended IR sessions to explain the benefits of the merger one by one. He also gave multiple media interviews. When the CEO directly communicated with shareholders, opposition quickly faded. Similarly, the Hanmi Pharm brothers actively conveyed their positions through interviews and communicated with small shareholders.

The difference in communication led to a difference in voting outcomes. The side that communicated overwhelmingly scored points. The final decision in the closely contested battle, which swung back and forth between the largest individual shareholders and the National Pension Service, was made by the small shareholders rather than the major shareholders. The Hanmi Science shareholders' meeting demonstrated the reality that management can no longer ignore small shareholders, who are the true owners of the company, no matter how many meetings are held.