Namyang Dairy Urgently Convenes Board Meeting... Will Specific Reform Plans Emerge?

Hong Won-sik, chairman of Namyang Dairy Products, recently issued a public apology regarding the controversy caused by the announcement that the company's dairy product, Bulgari, has a COVID-19 suppression effect. On the 4th, he announced his resignation as chairman after apologizing to the public at the main auditorium of Namyang Dairy Products headquarters on Dosan-daero, Gangnam-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Seungjin Lee] Namyang Dairy Products convened an emergency board meeting amid the so-called 'Bulgaris Incident,' with key executives including the chairman and CEO all vacant.

According to the food industry on the 8th, Namyang Dairy Products held an emergency board meeting yesterday morning to discuss measures to resolve the management vacuum. Namyang Dairy Products CEO Kwangbeom Lee took responsibility for the 'Bulgaris Incident' and tendered his resignation on the 3rd, and the next day Chairman Wonshik Hong also resigned.

At a public apology press conference, Chairman Hong tearfully said, "I will take responsibility for everything and step down from the position of chairman of Namyang Dairy Products," adding, "I will also not pass on the management rights to my children," but he failed to present specific reform measures.

It appears that Namyang Dairy Products discussed plans for reorganizing the management, including appointing a successor CEO, at the board meeting. Possibilities such as entering an emergency management system or recruiting an external figure as CEO are being mentioned.

A Namyang Dairy Products official said in this regard, "There will be something we can inform you about around the 10th."

As calls arise for breaking away from the closed governance structure centered on the family controlling the company to achieve management reform, attention is focused on whether Namyang Dairy Products will present concrete measures.

Meanwhile, Chairman Hong abruptly resigned 21 days after the 'Bulgaris Incident' on the 13th of last month. Namyang Dairy Products announced research results claiming that its Bulgaris fermented milk product was effective against the COVID-19 virus, but the Korea Disease Control and Prevention Agency directly intervened, stating that it was difficult to confirm COVID-19 preventive effects as the experiment was conducted only at the cellular level without clinical trials, leading to immediate backlash.

The Ministry of Food and Drug Safety filed a complaint against Namyang Dairy Products for violating the Food Labeling and Advertising Act, and on the 30th of last month, the company’s headquarters was even raided by the police.

This content was produced with the assistance of AI translation services.