Im Jong-yoon Aims to Lead Hanmi Pharm... National Pension Service Expresses 'Opposition'

The National Pension Service (NPS) expressed opposition to Director Jong-yoon Lim of Hanmi Science joining the board of directors of Hanmi Pharm, to which Director Lim responded with regret and a direct rebuttal.

Jong-yoon Lim, Director of Hanmi Science, and Jong-hoon Lim, CEO of Hanmi Pharm (second from the left), are attending the '51st Hanmi Science Annual General Meeting of Shareholders' held last March at Syntex in Hwaseong, Gyeonggi Province. Photo by Jinhyung Kang aymsdream@

Hanmi Pharm will hold an extraordinary general meeting of shareholders on the 18th to propose the appointment of Director Jong-yoon Lim and CEO Jong-hoon Lim of Hanmi Science as inside directors, Chairman Dong-guk Shin of Hanyang Precision as a non-executive director, and CEO Byung-ho Nam of Herings as an outside director. Since Hanmi Science, the holding company, holds an overwhelming 41.4% stake as of the end of last year, the agenda is expected to pass smoothly. After the shareholders' meeting, Director Jong-yoon Lim is expected to become the CEO of Hanmi Pharm.

However, the National Pension Service, which holds a 9.95% stake in Hanmi Pharm, expressed opposition to three of the four director candidates excluding CEO Lim. The reasons vary: Director Lim was criticized for low board attendance, Chairman Shin for excessive concurrent positions, and CEO Nam for conflicts of interest with the company.

The NPS guidelines on fiduciary responsibility for the National Pension Fund stipulate opposition to director candidates who ▲ have excessive concurrent positions making it difficult to fulfill their duties faithfully, ▲ had a board attendance rate below 75% during the previous term, or ▲ in the case of outside director candidates, have advisory contracts such as legal or management consulting with the company, thereby compromising their independence as outside directors.

Earlier, at the Hanmi Science shareholders' meeting in March where the Lim brothers, Jong-yoon and Jong-hoon, faced off directly against mother and daughter Song Young-sook and Lim Joo-hyun, the NPS sided with the mother and daughter, stating that their director candidates were judged to better align with long-term shareholder value enhancement. The NPS has now expressed opposition to Director Jong-yoon Lim at the Hanmi Pharm shareholders' meeting as well.

Hanmi Pharmaceutical Headquarters Exterior [Photo by Hanmi Pharmaceutical]

Regarding the low board attendance rate, Director Lim explained, "At that time, the Hanmi Pharm board was dominated by personnel from private equity funds, who were the main culprits of the management rights dispute, along with existing board members who cooperated with them." He added, "I abstained from attending to exercise my veto power as a board member." He claimed that even before the management rights dispute surfaced, private equity funds were leading efforts to exclude him from work and take control of the organization.

He also emphasized that attending the board of the subsidiary Hanmi Pharm was not practical while being excluded from the holding company Hanmi Science due to the management rights dispute. Director Lim’s side argued, "This was not normal management activity but a situation where private equity funds were damaging the value of a listed company," and "It should be seen as a legitimate expression of opinion as a manager."

Director Lim criticized the NPS, saying, "Opposing the shareholders' meeting agenda solely based on board attendance rate goes against the current trend of resolving the Korea discount."