The management dispute at Hanmi Pharmaceutical Group, which has been the focus of industry attention for some time, appears to be reaching a resolution. Hanmi Pharmaceutical has appointed its first external Chief Executive Officer (CEO) in its 53-year history, a move that seems to reflect the wishes of Shin Dong-guk, the largest individual shareholder of the holding company Hanmi Science and chairman of Hanyang Precision.
However, the board includes members aligned with Chairwoman Song Young-sook and Vice Chair Im Joo-hyun, who stand in opposition to Chairman Shin. It’s expected that the four-party alliance (Shin Dong-guk, Song Young-sook, Im Joo-hyun, and Radepangs) will continue to collaborate while maintaining a system of checks and balances.
On Tuesday, Hanmi Science and Hanmi Pharmaceutical held their annual shareholder meetings at the group’s headquarters in Songpa District, Seoul, at 9:00 a.m. and 11:00 a.m. (South Korean time), respectively.
The primary focus was on the appointment of Hanmi Pharmaceutical’s new CEO. Tensions had recently escalated as the conflict between Chairman Shin and CEO Park Jae-hyun became public.
The management dispute erupted following allegations of sexual misconduct against a senior executive, which Chairman Shin allegedly tried to protect. This led to a rift between Shin and CEO Park. As Park’s term was ending, Hwang Sang-yeon, head of HB Investment’s Private Equity division, was tapped as the new CEO of Hanmi Pharmaceutical. Reports suggest that Chairman Shin played a significant role in this decision.
Some industry observers speculate that this move could be part of Chairman Shin’s strategy to sell his shares.
For Hwang to assume leadership at Hanmi Pharmaceutical, he needed to clear both the shareholder meeting and board of directors. His rise coincided with existing tensions between current management and major shareholders, leading to speculation about a potential showdown at the shareholder meeting. However, the agenda passed without significant controversy.
Management Control Dispute Resolved… Pledge to Boost Customer, Employee and Shareholder Value
With former CEO Park Jae-hyun’s resignation and Hwang’s smooth appointment, the management dispute at Hanmi Pharmaceutical seems to be drawing to a close.
However, it would be premature to declare the situation fully resolved. Chairman Shin has clashed with former CEO Park on various issues, including demands for a review of technology transfer contracts and concerns over raw material changes for Hanmi Pharmaceutical’s dyslipidemia treatment, Rosuzet.
In contrast, Chairwoman Song has emphasized the importance of maintaining independence in the professional management system. Notably, Song’s faction has filed a lawsuit worth 60 billion KRW (approximately 39 million USD), alleging that Chairman Shin violated shareholder agreements by issuing convertible bonds secured against his Hanmi Pharmaceutical shares. This has reportedly created tension between the two sides.
At the Hanmi Science shareholder meeting, Kim Nam-kyu, CEO of Radepangs Partners, was appointed as a non-executive director, signaling a shift in the management structure. Radepangs holds a 9.81% stake in Hanmi Science, potentially increasing its influence over the group’s management.
In light of these developments, Hwang has expressed his commitment to upholding the management philosophy of the late founder, Lim Sung-ki, which emphasizes respect for humanity and value creation, aiming to alleviate external concerns.
Hwang stated that it’s aware of the expectations and concerns regarding his appointment. However, he believes that by focusing on creating value for the customers, employees, and shareholders, it can address any issues that arise. He added that he’ll maintain regular consultations with the holding company while preserving an independent management perspective, collaborating in a manner consistent with the typical relationship between a holding company and its subsidiaries.
Following these appointments, Hanmi Pharmaceutical’s board of directors now consists of ten members: four internal directors—Hwang Sang-yeon, Lim Jong-hoon, Choi In-young, and Kim Na-young; four external directors—Han Tae-jun, Kim Tae-yoon, Lee Young-gu, and Chae Yi-bae; and two non-executive directors, Shin Dong-guk and Kim Jae-kyo.