'Namyang Dairy Products' Commitment... Hahn & Company Decides to Succession Employee Employment

The headquarters of Namyang Dairy Products in Gangnam-gu, Seoul.
[Image source=Yonhap News]

[Asia Economy Reporter Seungjin Lee] The private equity firm Hahn & Company, which is acquiring Namyang Dairy Products, will succeed the employment of Namyang Dairy employees without artificial restructuring. Additionally, it will introduce an executive officer system to strengthen transparent management and oversight functions at Namyang Dairy.

According to Hahn & Company on the 5th, they will enhance Namyang Dairy's competitiveness by succeeding employment without artificial restructuring. Since this acquisition is a genuine sale without conditions such as call options or preemptive rights, the plan focuses on improving Namyang Dairy's governance structure and stable operation through employment succession. They denied allegations of a 'parking deal,' a contract disguised as disposing of corporate management rights and repurchasing shares after a certain period.

On the 27th of last month, Namyang Dairy announced that the largest shareholder Hong Won-sik and two others signed a stock transfer agreement (SPA) to transfer all shares held by Namyang Dairy to Hahn & Company for 310.72916 billion KRW. This structure transfers all 53.08% of shares held by the owner family, including former Namyang Dairy Chairman Hong Won-sik.

Hahn & Company will introduce the executive officer system, first applied to an investment company in Korea, to Namyang Dairy. They plan to strengthen transparent management, administration, and oversight functions. The executive officer system delegates decision-making and execution authority regarding business from the board of directors to executive officers. This system improves governance by having the board supervise the executive officers and can enhance management efficiency.

Hahn & Company stated, "Based on our experience of growing major domestic investment companies into leading Korean enterprises through performance improvement, we will strengthen Namyang Dairy's competitiveness," adding, "We plan to introduce the executive officer system to Namyang Dairy to enhance transparent management, administration, and oversight functions."

Meanwhile, the police are accelerating their investigation into Namyang Dairy. On the 2nd, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency summoned Mr. A, head of Namyang Dairy's antiviral immunity research institute, for questioning. In April, Mr. A announced at a symposium hosted by Namyang Dairy that their fermented milk product Bulgari has a preventive effect against COVID-19. The police are reportedly verifying the circumstances of the announcement and whether there was a promotional purpose.

Earlier, the Ministry of Food and Drug Safety reported Namyang Dairy to the police for violating the Food Labeling and Advertising Act. This was because Bulgari was announced to have COVID-19 preventive effects without undergoing animal or clinical trials. The Ministry believes that Namyang Dairy held the symposium not for purely academic purposes but for promotional reasons.

On April 30th, the police conducted raids at six locations, including Namyang Dairy's headquarters in Gangnam-gu, Seoul, and the Sejong Research Institute. They plan to summon former Namyang Dairy CEO Lee Kwang-beom for questioning soon. It is understood that the police have completed a significant portion of their investigation into Namyang Dairy officials.

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