Amendment to Articles of Incorporation Not Rejected, New Director Appointment Approved
Attention Focused on Hanmi Pharm's Extraordinary General Meeting on the 19th of Next Month
If Another Deadlock Occurs, Dispute Expected Until Next Year's Annual General Meeting
The three-party alliance (Hanmi Pharmaceutical Group Chairwoman Song Young-sook, Vice Chairman Lim Joo-hyun, and Hanyang Precision Chairman Shin Dong-guk) achieved a 'half victory' in the management rights dispute within Hanmi Pharmaceutical Group. Neither side secured firm support from shareholders, suggesting that the conflict over management rights is likely to be prolonged.
An extraordinary general meeting of Hanmi Science, part of the Hanmi Pharm Group undergoing a management dispute, was held on the 28th at the Seoul Transportation Center. Stakeholders, shareholders, and reporters are standing at the entrance of the meeting hall. Photo by Heo Young-han
At the Hanmi Science extraordinary general meeting held on the 28th at the Seoul Metropolitan Transportation Corporation building in Songpa-gu, Seoul, the three-party alliance's proposal to amend the articles of incorporation was rejected.
The proposed amendment to increase the number of directors from up to 10 to up to 11 requires a special resolution with approval from two-thirds (approximately 66.7%) of the shareholders present. The approval rate for individual agenda items was not disclosed. The attendance rate at the extraordinary general meeting was 84.7% (57,340,864 shares) out of the total voting shares of 67,713,706.
This general meeting was a gamble by the three-party alliance, which holds nearly a majority stake but believed it was difficult to regain management rights under the current articles of incorporation. The alliance aimed to appoint Chairman Shin as a non-standing director and Vice Chairman Lim as an inside director, adding two new directors to reorganize the board to a 6 to 5 ratio and seize control of management.
However, the appointment of new directors, which was a general resolution item, was approved, and Chairman Shin was appointed as a non-standing director. The appointment of Vice Chairman Lim as an inside director was automatically discarded due to the failure of the articles of incorporation amendment. General resolution items require approval by a majority of shareholders present.
As a result of this extraordinary general meeting, the Hanmi Science board is evenly split with five members from the three-party alliance and five from the sibling faction, resulting in a 5 to 5 tie. The alliance failed to achieve its goal of controlling the holding company's management rights.
At the meeting, the proposal by Hanmi Science to reduce capital reserves was also approved. The company previously explained that this reduction of 100 billion KRW from the capital surplus in the capital reserves was intended to distribute dividends to shareholders.
After the meeting, CEO Lim stated in a press meeting, "We will demonstrate stronger leadership for the company." Chairman Shin also expressed in a statement immediately after the meeting, "I feel a heavy responsibility upon entering the board," and added, "We will quickly resolve the ongoing intense dispute."
The three-party alliance and the sibling faction have already escalated the management rights battle into litigation by filing lawsuits against each other. The public opinion war to win over minority shareholders' votes is also worsening.
Both sides are preparing for a vote at the Hanmi Pharmaceutical extraordinary general meeting scheduled for the 19th of next month, which will include an agenda to dismiss Hanmi Pharmaceutical CEO Park Jae-hyun.
With no clear winner at this extraordinary general meeting, attention is turning to the Hanmi Pharmaceutical extraordinary general meeting on the 19th. The sibling faction has proposed agenda items including the dismissal of CEO Park Jae-hyun and four directors including non-standing director Chairman Shin.
Although Hanmi Science holds 41.42% of Hanmi Pharmaceutical shares, the special resolution requiring two-thirds approval of attending shareholders makes the outcome uncertain. Additionally, the three-party alliance, now holding half of Hanmi Science's board seats, may demand board approval before exercising voting rights, potentially blocking Hanmi Science's vote.
If no winner emerges at the Hanmi Pharmaceutical extraordinary general meeting, it is expected that the dispute will continue until the Hanmi Science regular general meeting in March next year.
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