Namyang Dairy Steps Up Governance Reform, Chairman Hong Won-sik Family Resigns as Registered Directors

[Asia Economy Reporter Seungjin Lee] Namyang Dairy Products, which is undergoing reform amid the controversy over the 'Bulgaris incident,' is set to improve its governance structure.

On the 17th, the Namyang Dairy Products Emergency Response Committee stated, "Two directors from the major shareholder family within the current board, Ji Songjuk and Hong Jinseok, will resign from their registered director positions, and we will request the board to expand the number of outside directors with expertise." They added, "We are thoroughly reviewing all measures, including the major shareholder's equity structure, to launch a new Namyang," revealing the major shareholder's response regarding governance improvement.

Earlier, on the 7th, Namyang Dairy Products convened an emergency board meeting and formed an emergency committee led by Plant Manager Jeong Jaeyeon as chairman. The committee had requested the major shareholder to propose governance improvement measures.

Ji Songjuk, who is resigning from the registered director position this time, is the mother of Chairman Hong Wonsik. Executive Director Hong Jinseok, the chairman's eldest son and head of the management strategy division, was dismissed from his post last month amid allegations of using company funds to rent a luxury foreign car for personal use.

As of the end of last year, the shareholding structure of Namyang Dairy Products shows that the largest shareholder is Chairman Hong Wonsik, holding 51.68%. Including the chairman's wife and siblings, the family’s total shares amount to 53.08%.

Emergency Committee Chairman Jeong Jaeyeon said, "We are focusing on restoring consumer trust and preparing sincere follow-up measures such as detailed organizational appointments for intensive innovation and the formation of an external advisory group."

Namyang Dairy Products faced backlash after holding an academic symposium on the 13th of last month, hosted by the Korea Institute of Medical Science, where they announced that "Bulgaris has been confirmed to have antiviral effects against COVID-19." Following this, they faced a boycott and were reported to the Ministry of Food and Drug Safety, which led to a search and seizure at the headquarters.

In response, Chairman Hong held a public apology press conference on the 4th, stating, "I will take responsibility for everything," and expressed his intention to resign. He also declared that he would not pass on management rights to his children.

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