Approval of Han&Co Director Appointment at Regular General Meeting
Speeding Up Namyang Dairy Management Normalization Expected
Han & Company (Han&Co), a private equity fund (PEF) operator that became the new owner of Namyang Dairy Products after winning the management rights dispute against Chairman Hong Won-sik, replaced a large number of executives at the regular shareholders' meeting on the 29th. Attention was focused on whether Chairman Hong, the former largest shareholder, would approve the appointment of Han&Co directors, and with his approval, the agenda passed, allowing Han&Co to become the largest shareholder and secure actual management rights.
At the 60th regular shareholders' meeting held at the 1964 Building in Nonhyeon-dong, Gangnam-gu, Seoul, Namyang Dairy Products approved the appointment of four new directors as originally proposed: Yoon Yeo-eul, Chairman of Han&Co; Vice President Bae Min-gyu; Vice President Lee Dong-chun; and Lee Myung-chul, Chairman of the Korea Pasteur Institute. The existing board members, including Chairman Hong, who was an inside director, stepped down.
On the 29th, the scene of the 60th Namyang Dairy Products shareholders' meeting [Photo by Namyang Dairy Products].
The key issue at the shareholders' meeting was whether Chairman Hong would cast a dissenting vote against the appointment of Han&Co personnel as new directors. Earlier, on the 22nd, the Seoul Central District Court dismissed Han&Co's injunction request against Chairman Hong and others regarding the exercise of voting rights. The injunction sought to compel Chairman Hong, who was the largest shareholder as of the end of last year, to approve the agenda item to appoint Han&Co Chairman Yoon Yeo-eul as a non-executive director at the regular shareholders' meeting, aiming to prevent Chairman Hong from casting a dissenting vote.
However, with the court dismissing the injunction, the possibility opened for Chairman Hong to cast a dissenting vote at the regular shareholders' meeting, making his vote the biggest point of interest at the meeting. Previously, the court had approved Han&Co's request to convene an extraordinary shareholders' meeting last month, which meant that regardless of Chairman Hong's vote on the regular meeting agenda, Han&Co could hold an extraordinary meeting to secure management rights over Namyang Dairy Products.
With the executive replacement on this day, Han&Co is expected to accelerate the normalization of Namyang Dairy Products' management. The food industry anticipates that Namyang Dairy Products will pursue a name change in the future. Currently, the company name is derived from the founding family’s surname, ‘Namyang Hong,’ and due to damage to the corporate image over recent years, it is considered that the existing name may not be beneficial for future business development. Meanwhile, Namyang Dairy Products plans to launch new products marking its 60th anniversary, including strengthening its health functional food lineup with the protein brand ‘Takefit’.
Han&Co recently stated in a press release, “To normalize the company’s management, we will promptly execute the stock purchase agreement and establish plans for improving management with Namyang Dairy Products’ employees,” adding, “We will restore consumer trust and create a new Namyang Dairy Products.”
At the shareholders' meeting, an amendment to the articles of incorporation was approved to introduce an executive officer system. A proposal by activist fund Cha Partners Asset Management to split Namyang Dairy Products’ issued shares at a ratio of 10 to 1 was also discussed but was rejected.
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