Kolmar Family Sibling Conflict Ignites... Younger Sister Says "Premature to Replace Management"

All Major Decisions Made in Consultation with Vice Chairman Yoon Sanghyun
Difficult to Understand Criticism of Sister's Management Capabilities
Yoon Yeowon: "Shareholder Value Is the Top Priority... Will Respond According to Proper Procedures"

Kolmar BNH, a company specializing in the manufacturing, development, and production (ODM) of health functional foods, has refuted the request from its holding company, Kolmar Holdings, to change its CEO structure and board of directors, calling it "premature."

On May 12, Kolmar BNH released a statement responding to Kolmar Holdings' recent submission of a request to the Daejeon District Court for permission to convene an extraordinary general meeting of shareholders. The company stated, "Given that we are currently implementing mid- to long-term strategies to achieve a performance turnaround and enhance corporate value, this move is premature."

Previously, Kolmar Holdings had proposed holding an extraordinary shareholders' meeting to appoint Vice Chairman Yoon Sanghyun and former CJ CheilJedang Vice President Lee Seunghwa as inside directors, citing poor performance as the reason. When Kolmar BNH refused to accept this proposal, Kolmar Holdings submitted a request to the Daejeon District Court for approval to convene the shareholders' meeting. The stated reason was the need to change the board composition to normalize management and enhance shareholder value.

Kolmar BNH countered this by stating that, despite an overall downturn in the health functional food industry over the past two years, the company achieved sales growth and was the only player in the industry to record such growth. Last year, the company posted record-high consolidated sales of 615.6 billion KRW.

The company also pointed to the visible results of large-scale investments in its Sejong Plant No. 3. "The utilization rate of Sejong Plant No. 3 is rising rapidly, and profitability is also improving," the company said. "We expect operating profit to stabilize soon, which is inconsistent with Kolmar Holdings' claims of poor performance."

Yoon Yeowon, CEO of Kolmar BNH.

The company further emphasized that the argument for enhancing shareholder value lacks persuasiveness. Kolmar BNH explained that it was the only group affiliate selected as one of the Korea Value-Up Top 100 companies last year, and that it is currently implementing a profitability enhancement strategy based on a three-year mid- to long-term plan, which includes improving return on equity (ROE) and raising corporate value.

Furthermore, Kolmar BNH criticized the sudden mention of "management normalization" and questioning of the management capabilities of the subsidiary CEO?who is the younger sister of the holding company's vice chairman?at a time when performance improvements are becoming evident, despite all major management decisions having been made in consultation with the holding company and Vice Chairman Yoon Sanghyun. The company argued that this is difficult to accept and is closer to the holding company admitting its own failure to support the independent management of its subsidiary.

Kolmar BNH also argued that the demand to change the CEO structure and board of directors is inappropriate at this time. "In 2020, when we had a co-CEO structure, both sales and operating profit reached record highs due to a special boom in health functional foods caused by COVID-19," the company stated. "Currently, we are overcoming structural challenges and entering a recovery trajectory, so maintaining strategic continuity with the existing management team is more important than ever to sustain this recovery."

Finally, Kolmar BNH expressed concern that demanding an extraordinary shareholders' meeting and changes to inside directors just over a month after finalizing the 2025 management plan and new board composition at the regular shareholders' meeting in March could cause unnecessary confusion among shareholders and in the market.

CEO Yoon Yeowon stated, "Maximizing corporate value and shareholder value is our top priority, and we are reviewing response measures from multiple angles. We plan to respond in accordance with proper procedures," adding, "Any related discussions should be approached carefully and based on substantive validity."