Court Prohibits Chairman Hong from Disposing Shares... Hahn & Co. States "Contract Remains Valid"

[Asia Economy Reporter Seungjin Lee] The court has issued an injunction prohibiting the disposal of Namyang Dairy Products shares held by Chairman Hong Won-sik and his wife, Advisor Lee Un-kyung. This decision was made amid Chairman Hong’s notification to the private equity firm Hahn & Company (Hahn & Co) of the termination of the stock purchase agreement, and it is expected that legal battles between Chairman Hong and Hahn & Co will continue.

On the 1st, Hahn & Co stated in a press release that the Seoul Central District Court had issued an injunction prohibiting the disposal of Namyang Dairy Products shares held by Chairman Hong’s family. After the sudden postponement of the extraordinary shareholders’ meeting scheduled in July to sell the shares and management rights of Chairman Hong’s family, Hahn & Co filed a lawsuit demanding the fulfillment of the transaction closing obligations.

Regarding Chairman Hong’s announcement on the same day that he had notified Hahn & Co of the termination of the stock purchase agreement, Hahn & Co rebutted, stating that "the contract remains valid." Furthermore, Hahn & Co denied all allegations from Chairman Hong’s side, including ▲reversal of previously agreed matters ▲breach of confidentiality obligations ▲unequal contract terms ▲posing as the owner of Namyang Dairy Products and unfair management interference, calling them "completely unfounded."

Regarding the claims about contract termination, Hahn & Co explained, "Whether the management rights stock purchase agreement is terminated is a serious matter, and Chairman Hong’s announcement that the contract was terminated after August 31 is not true and legally invalid."

They added, "The court accepted Hahn & Co’s position and prevented Chairman Hong’s shares from being disposed of arbitrarily," emphasizing, "If the transaction closing was indeed on August 31 as Chairman Hong claims, it should be clearly explained why the decision was made to postpone the shareholders’ meeting to September 14."

Hahn & Co also denied the claim that they changed their stance on the agreed matters, stating, "This is completely unfounded. All agreements remain in writing, and there is an abundance of materials that contradict such claims."

In particular, after the announcement of the main contract, Chairman Hong’s side had only made requests such as price renegotiations, which were difficult for Hahn & Co to accept, but suddenly after mid-August, they asserted unreasonable demands as "preconditions" for transaction closing.

Hahn & Co also rebutted Chairman Hong’s claim that the contract was unequal and favorable only to the buyer. While unable to disclose specific details, Hahn & Co explained that it was rather Chairman Hong’s side that demanded strong measures to guarantee the certainty of the transaction. Regarding the allegation of breach of confidentiality obligations, Hahn & Co stated, "We have not violated any confidentiality obligations."

On the same day, Chairman Hong announced that he had notified Hahn & Co of the termination of the stock purchase agreement, resulting in a standoff between the two parties. Chairman Hong said, "In this M&A transaction, unusually, no deposit was received, and the contract terms were unilaterally favorable to the buyer, an unequal contract. Nevertheless, I quietly proceeded with the stock sale contract to fulfill the greater purpose of restoring normal management of Namyang Dairy Products through a change in management rights."

Chairman Hong explained, "Contrary to rumors circulating after the contract signing, no additional demands that were not agreed upon at the time of the contract were made, and only matters mutually agreed upon with the buyer before the contract signing were requested to be fulfilled." However, Chairman Hong claims that Hahn & Co changed their attitude after the contract signing and refused to fulfill previously agreed matters.

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