The internal management dispute among the owners of Hanmi Pharmaceutical Group, which stirred up a commotion earlier this year, has reignited. Since the dispute originally revolved around funding issues and this problem remains unresolved, the seemingly settled conflict has flared up again. Given that family shares are divided among members, if one side unilaterally takes control, the other side's backlash is inevitable, raising concerns that finding a resolution will not be easy.
The owners of Hanmi Pharmaceutical Group. Song Young-sook, Chairwoman of Hanmi Pharmaceutical Group (top left in the photo, clockwise), Lim Joo-hyun, Vice Chairman of Hanmi Pharmaceutical Group, Lim Jong-hoon, CEO of Hanmi Science, and Lim Jong-yoon, Director of Hanmi Science.
Hanmi Science, the holding company of Hanmi Pharmaceutical Group, held an extraordinary board meeting on the 14th and abruptly dismissed Song Young-sook, CEO of Hanmi Science (Chairman of Hanmi Pharmaceutical Group), from her position. This came just over a month after the announcement of a co-CEO system with Lim Jong-hoon, CEO of Hanmi Science, earlier last month. The company explained in a disclosure that the change was made "to improve management efficiency by switching to a sole CEO system."
The dismissal is reported to have been influenced by conflicts between the Lim brothers, Jong-yoon and Jong-hoon, and the mother-daughter duo, Song Young-sook and Lim Joo-hyun, over executive appointments and investment attraction. In particular, regarding personnel matters, a notice was even issued internally but was withdrawn after ten days due to the lack of approval from the CEO, causing an embarrassing situation. Since decision-making is impossible without the agreement of both CEOs under the co-CEO system, the company's vision restructuring stalled, leading CEO Lim to push for the abrupt termination of the co-CEO system.
An industry insider said, "The brothers lacked the composure of a winner, and the mother and daughter lacked the acceptance of defeat. Basic personnel agreements could not be reached, leading to the decision to dismiss the mother as it was judged that nothing could be accomplished otherwise." After the board meeting, CEO Lim emphasized to reporters the need to "accelerate the company's development" and stressed the importance of swift management.
The differing philosophies on investment attraction between the two sides are also cited as a cause of conflict. During the approximately two years when the mother-daughter duo led group management, they primarily engaged with companies like Samsung Biologics, which could act as strategic investors (SI), or companies such as Kumho Petrochemical, Soulbrain, Kolmar Korea, and OCI, which were seeking investment to secure new growth engines.
However, the brothers are known to prefer attracting financial investors (FI). After the brothers won at the shareholders' meeting, prominent private equity firms such as Kohlberg Kravis Roberts (KKR), Carlyle, Bain Capital, and EQT Partners quickly emerged as potential buyers. On the other hand, Chairman Song expressed early this year during the dispute that she earnestly hoped her sons would not make the foolish mistake of selling shares to foreign funds that tempted them with high prices. It is reported that she rejected several offers from foreign funds to sell shares. Although the mother-daughter duo did enter into a stock sale agreement with the FI private equity firm Equity First Holdings, this was a repurchase agreement to buy back shares after five years and did not affect management control. CEO Lim Jong-hoon also participated in the sale. Therefore, it is analyzed that Chairman Song's continued resistance to FI attraction attempts led to the recent CEO dismissal.
However, realistically, without transferring management rights, it is difficult to attract proper investment, and if such conflicts continue, the owner's dilemma of raising over 800 billion KRW?combining unpaid inheritance tax (264.4 billion KRW) and stock-backed loan repayments (537.9 billion KRW)?is expected to deepen. Even combining the brothers' stake (28.4%) with that of Shin Dong-guk, Chairman of Hanyang Precision (12.4%), who joined them, Hanmi Science's total shareholding is 40.8%, falling short of a majority.
In the investment industry, it is assessed that without an absolute majority stake securing management rights or at least a share transfer agreed upon by both the brothers and the mother-daughter duo, it is difficult to proceed with investment. Investing without such guarantees in a company that suffered internal strife due to one-sided share sales attempts just two months ago carries significant risks. However, with Chairman Song's dismissal reigniting the management dispute, there are concerns that investor sentiment may further freeze. Although the brothers emphasized family and company harmony after taking control and did not significantly disrupt existing personnel, there are worries that if they launch a large-scale personnel reshuffle following Chairman Song's dismissal, the stability of company operations could be jeopardized.
However, both the mother-daughter side and the brothers have expressed strong opposition to selling a majority stake, saying, "While funding is under consideration, selling more than 50% of shares is out of the question," making funding prospects more difficult. Although there is a need for funding and some sales may occur, transferring management rights is considered unlikely. A source close to Director Lim Jong-yoon explained, "It is hard to say the brothers are under severe pressure to raise funds. Director Lim Jong-yoon could sell part of the shares of Kori Group, which he owns 100%, and CEO Lim Jong-hoon still has room for additional secured loans, so it is not entirely impossible to secure funds for inheritance tax payments without selling shares."
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