Hanmi Pharm Dispute 'Reignited'... Once Again, 국민연금 and Small Shareholders' Votes Make the Difference

Shin Dong-guk and Mother-Daughter Trio Alliance Demand Extraordinary General Meeting
Move to Seize Holding Company Board Control via Articles Amendment
'Special Resolution Requirement' Outcome Depends on Pension Funds and Minority Shareholders

The management dispute within Hanmi Pharm Group, which seemed to have been settled with the victory of the brother faction, has reignited. Song Young-sook and Lim Ju-hyun, a mother and daughter duo allied with Shin Dong-guk, chairman of Hanyang Precision and the largest individual shareholder (non-executive director of Hanmi Pharm), have demanded the convening of an extraordinary general meeting to reclaim control of the group. However, for their counterattack to succeed, approval from more than 66.7% of voting rights is required, making it likely that the side winning over the National Pension Service and minority shareholders will prevail once again.

According to industry sources on the 30th, the alliance of Chairman Shin, Hanmi Pharm Group Chairwoman Song Young-sook, and Hanmi Pharm Group Vice Chairman Lim Ju-hyun filed a request the day before to convene an extraordinary general meeting of Hanmi Science, the group's holding company. Two agenda items were proposed: increasing the number of board members of Hanmi Science from the current maximum of 10 to 12, and appointing three new directors (two inside directors and one other non-executive director). The extraordinary general meeting is expected to be held in about two months.

The three-party alliance explained their intention, stating, "Through the approval of this agenda, we will quickly stabilize the management situation of Hanmi Pharm Group, which the market is concerned about," and "We will establish a 'Korean-style advanced governance system' where major shareholders and professional managers harmonize."

Difficulties in Securing Management Rights Despite Large Shareholding... Will the Counterattack Succeed?

The convening of this extraordinary general meeting is interpreted as the three-party alliance, which has secured nearly half of the friendly shares, launching a full-scale effort to regain management control. They gathered 48.19% of shares through the sudden formation of the alliance on the 3rd, but have not yet seized control of Hanmi Science, the group's holding company. Currently, the Hanmi Science board consists of four members from the alliance and five from the brother faction, leaving the alliance at a disadvantage. Moreover, CEO Lim Jong-hoon of Hanmi Science has ousted Chairwoman Song Young-sook and established a sole representative system, thereby monopolizing management control.

Subsequently, the alliance also attempted to pursue smooth agreements with the brother faction rather than an all-out confrontation, but these efforts reportedly failed. The alliance agreed to establish a professional management system with the owner family stepping back from frontline roles, but the brother faction insisted on directly intervening in management even within the professional management system, resulting in a deadlock.

Accordingly, since under the current articles of incorporation, even if the alliance adds the maximum number of directors, the board would be evenly split 5 to 5, the alliance appears to be attempting to change the rules of the game entirely. However, amending the articles requires a special resolution at the shareholders' meeting under commercial law, needing approval from 66.7% of voting rights present. Currently, Hanmi Science's shareholding structure is 48.19% for the alliance and 29.07% for the brother faction, making it uncertain whether the alliance will win or the brother faction will block the amendment.

Therefore, the votes of the National Pension Service, which holds 6.04% of shares, and other minority shareholders are expected to determine the outcome. Industry insiders predict that the National Pension Service will side with the three-party alliance, as it opposed all director appointment proposals recommended by the brother faction at Hanmi Science's shareholders' meeting in March, and also opposed all brother faction director candidates except CEO Lim Jong-hoon at Hanmi Pharm's shareholders' meeting last month after the brother faction gained the upper hand.

Minority shareholders who supported the brother faction at the March shareholders' meeting are also increasingly likely to switch sides. The Hanmi Science Minority Shareholders Coalition recently requested meetings with all three siblings, but only Vice Chairman Lim responded directly, after which they expressed support for transitioning to a professional management system.

The brother faction immediately expressed opposition. A representative from Director Lim Jong-yoon's side at Hanmi Pharm stated, "We could support Chairman Shin's entry into the board, but increasing the number of directors is a unilateral decision without agreement," adding, "Since the situation is still under discussion and no decision has been made, we ask not to escalate this into a dispute."