Victory for 4-Person Alliance Including Mother-Daughter Side at March 19 Special General Meeting
Another Vote Battle Expected at Next March's Regular General Meeting
The dismissal of Park Jae-hyun, CEO of Hanmi Pharm, and Shin Dong-guk, Chairman of Hanyang Precision (Non-Executive Director), which was pushed by Lim Jong-yoon and Lim Jong-hoon, the eldest and second sons of the founder of Hanmi Pharm, to seize control of the group’s management rights, has failed.
Park Jae-hyun, CEO of Hanmi Pharm, is sharing his thoughts on the results of the extraordinary general meeting held on the morning of the 19th at the Seoul Transportation Hall in Songpa-gu, Seoul. Photo by Choi Tae-won
According to Hanmi Pharm on the 19th, at the extraordinary general meeting of shareholders held that morning at the Seoul Metropolitan Government Transportation Hall in Jamsil, Seoul, the dismissal proposals for CEO Park and Chairman Shin were rejected. Among the pre-votes and on-site voting rights, only 52.62% supported the dismissal of CEO Park, and 53.64% supported the dismissal of Chairman Shin, failing to meet the special resolution threshold of 66.6%. The appointment of directors Park Joon-seok and Jang Young-gil, which was contingent on these dismissals, was also automatically rejected.
The number of shares present at the extraordinary general meeting was counted at 10,219,107 shares. Excluding treasury shares, 80.59% of the total 12,680,214 shares participated.
The Lim brothers, Jong-yoon and Jong-hoon, have been engaged in a management rights dispute with the '4-party alliance' led by the mother and daughter. The 4-party alliance consists of Song Young-sook, Chairwoman of Hanmi Pharm Group, Vice Chairman Lim Joo-hyun, Chairman Shin Dong-guk of Hanyang Precision, and La D?fense Partners, which acquired part of the mother and daughter’s shares.
The Hanmi Pharm board of directors is composed of 10 members: six from the mother and daughter side and four from the brothers’ side. The brothers aimed to dismiss CEO Park and Chairman Shin from the mother and daughter side and bring in their allies, Vice President Park Joon-seok of Hanmi Science and CEO Jang Young-gil of Hanmi Precision Chemical, to the board to secure a majority. However, with the dismissal proposals rejected, the brothers’ plan to oust the 4-party alliance executives was thwarted.
As a result, the Hanmi Pharm board maintains a 6 to 4 majority in favor of the 4-party alliance. Additionally, the proposal to appoint Vice President Park and CEO Jang as new directors was not put to a vote and was automatically discarded.
This outcome is interpreted as being due to significant support for the mother and daughter side from domestic and foreign institutional investors and minority shareholders. Apart from the brothers’ approximately 41% stake, the additional approval rate was only about 11%. Currently, Hanmi Pharm’s shareholding structure is led by the holding company Hanmi Science with 41.42%, followed by the National Pension Service with 10.1%, Chairman Shin with 7.72%, and Hanyang Precision with 1.42%. Minority shareholders are estimated to hold about 39%.
Following the extraordinary general meeting of Hanmi Science in November, this favorable result for the 4-party alliance is expected to strengthen Hanmi Pharm’s independent management trajectory. However, since the current board composition of Hanmi Science is balanced 5 to 5 between the 4-party alliance and the brothers, the management rights dispute is likely to be prolonged. Another vote showdown is anticipated at the regular general meetings of Hanmi Science and Hanmi Pharm in March next year.
At a press conference following the shareholders’ meeting, CEO Park Jae-hyun expressed, "I deeply thank the shareholders who have confirmed the firm leadership based on a solid professional management system," and added, "Together with the department heads leading Hanmi Pharm with me, we will unite our efforts to rebuild and further develop the Hanmi brand."
He also expressed his intention to focus on research and development (R&D). He emphasized, "We invested 160 billion KRW in R&D this year alone and will increase it to 200 billion KRW next year."
He also stressed that the consignment relationship with Hanmi Science will not be broken. Earlier, Hanmi Science pointed out in August that Hanmi Pharm had established new personnel and legal teams without prior discussion, violating the consignment contract between the holding company and Hanmi Pharm. CEO Park explained, "We have no intention of breaking the framework of the consignment relationship," and added, "The claim that we declared independent management by establishing these teams is the other party’s assertion."
Meanwhile, CEO Lim Jong-hoon conveyed his respect for the shareholders’ decision. Through a statement, he said, "I respect the decisions of the shareholders and will listen more carefully to opinions and voices that worry and consider the future of the group, including Hanmi Pharm," and added, "As the CEO of the holding company, although there are many concerns, I will do my best to ensure that the entire group carries out the best management and moves toward the right goals."
He continued, "No one should cause unnecessary conflicts or discord or engage in actions that shake the foundation of the group anymore," and added, "I sincerely ask all executives and employees of the group to focus on their respective roles so that the recent turmoil does not adversely affect corporate value or performance."
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