Lim Jong-yoon, an internal director of Hanmi Pharmaceutical, announced on the 2nd that he is considering a plan to halt the distribution transactions of pharmaceuticals within China between Kori Group, which he effectively owns, and Beijing Hanmi Pharmaceutical.
Lim, the eldest son of the late Lim Sung-gi, the founder of Hanmi Pharmaceutical Group, has shown conflicts over the group’s management rights with his mother, Chairwoman Song Young-sook, since early this year.
He made this statement to reporters after a board meeting held at Hanmi Pharmaceutical’s headquarters in Songpa-gu, Seoul, where a proposal to appoint him as the representative of Hanmi Pharmaceutical was rejected.
Earlier, in early July this year, some media raised suspicions that Lunmeikang, an affiliate of Kori Group, handling the distribution within China of pharmaceuticals produced by Beijing Hanmi, a subsidiary of Hanmi Pharmaceutical, might constitute unfair internal trading. In response, a fact-checking investigation was initiated regarding the matter.
He explained that China regulates pharmaceutical manufacturers from engaging in distribution simultaneously, so a company with pharmaceutical distribution qualifications is necessary. He emphasized, "This is not favoritism," stating that the transaction is conducted through a company within Kori Group that has obtained pharmaceutical distribution permits.
Regarding the current Hanmi Pharmaceutical management’s objection to the transaction, Lim retorted, "Are they telling me not to do it?" He also mentioned that following related reports and company actions, the Beijing municipal authorities are investigating the transactions between Beijing Hanmi Pharmaceutical and Kori Group.
Lim said he had expected his appointment as CEO to be approved at the board meeting that day.
He anticipated that some outside directors appointed while his mother, Chairwoman Song, was the CEO of the group’s holding company Hanmi Science would make neutral judgments. He also revealed that two outside directors, who he expected to vote in favor of a proposal he suggested, actually voted against it during the actual vote.
He is considering all possible methods, including holding an extraordinary general meeting of shareholders of Hanmi Pharmaceutical to replace the board, saying, "I am also considering using activist funds."
He stated that his earlier proposal, which includes himself and his younger brother Lim Jong-yoon, CEO of Hanmi Science, as well as their mother Chairwoman Song, sister Lim Joo-hyun, Vice Chairwoman, and Shin Dong-guk, Chairman of Hanyang Precision?forming a 'trilateral alliance' of five major shareholders of Hanmi Science?to decide the group’s direction through voting by these five major shareholders as a 'management community,' remains valid.
However, he noted that other family members have postponed discussions on this proposal and it is not progressing.
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