Will the Sale of Namyang Dairy Products Finally Fail...Hahn & Company Files Lawsuit Against Chairman Hong Won-sik

Hong Won-sik, chairman of Namyang Dairy Products, is leaving after holding a public apology press conference related to the 'Bulgaris incident' at Namyang Dairy Products headquarters in Gangnam-gu, Seoul on the 4th. Last month, Namyang Dairy Products announced at a symposium on 'Development of antiviral foods in the COVID-19 era' that the Bulgaris product was confirmed to reduce COVID-19 by 77.8%. However, the research results were reported to have exaggerated the results of animal 'cell-level' experiments, causing controversy. In response, Hong Won-sik, chairman of Namyang Dairy Products, expressed his intention to resign at the public apology press conference on the same day. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Seungjin Lee] The acquisition and merger (M&A) of Namyang Dairy Products is ultimately leading to a legal battle.

On the 30th, Hahn & Company (Hahn & Co) announced that it recently filed a lawsuit in court urging the sellers of the stock purchase agreement, including Namyang Dairy Products Chairman Hong Won-sik, to promptly fulfill their obligation to close the transaction.

Hahn & Co stated, "Due to the Namyang Dairy Products chairman's groundless delay in performance, unreasonable demands, and hints at the possibility of contract termination, we deemed litigation unavoidable. We have made efforts over the past few weeks through negotiations and persuasion to ensure a smooth closing of the transaction, but it appears that closing the deal will be difficult based on our goodwill alone."

Previously, the Namyang Dairy Products owner family signed a share acquisition contract in May to sell approximately 370,000 shares to Hahn & Co. The shareholding ratio is about 53%, and the transaction amount is 310.7 billion KRW. Namyang Dairy Products had planned to hold an extraordinary general meeting of shareholders on the 30th of last month to propose the appointment of new directors, including Hahn & Company Chairman Yoon Yeo-eul. However, Namyang Dairy Products suddenly postponed the shareholders' meeting to September 14, after the payment deadline of the 31st, raising the possibility of contract cancellation.

Hahn & Co explained, "If this delay in the sale is left unattended, it will set a bad precedent. We filed the lawsuit out of concern that a culture of disregarding contracts and promises, which are vital in the M&A market, might be created."

They added, "Our confidence in Namyang Dairy Products' potential and our intention to acquire remain unchanged. We hope that the parties involved and Namyang Dairy Products overcome this serious crisis promptly."

The Hong Won-sik chairman's side, through Namyang Dairy Products, stated on the same day, "There is still time left for negotiations to close the transaction, and we are proposing to do our best to negotiate for contract fulfillment during the remaining period. It is deeply regrettable that the acquirer has filed a lawsuit and issued a press release, thereby violating the confidentiality obligation under the contract. We plan to continue negotiations until the final deadline."

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