What’s Happening at Hanmi Pharm Group... Succession Structure Enters a Foggy Phase

Founder’s eldest son Lim Jong-yoon steps down as CEO of Hanmi Science
Brother Lim Joo-hyun also resigns as internal director of holding company
Mother Song Young-sook assumes sole management... Strengthening control, fostering competitive dynamics
As management dispute materializes, focus shifts to operating company Hanmi Pharm

[Asia Economy Reporter Lee Gwan-ju] The succession structure of Hanmi Pharmaceutical Group has fallen into uncertainty. Following the resignation of Lim Jong-yoon, the eldest son of the late founder and former chairman Lim Seong-gi, who served as CEO of the group’s holding company Hanmi Science for 12 years, from his position as an inside director, Lim Joo-hyun, the eldest daughter and president of Hanmi Pharmaceutical, has also decided to voluntarily resign from her position as an inside director of the holding company. With Song Young-sook, the spouse of the late Lim Seong-gi and mother of Lim Jong-yoon and Lim Joo-hyun, establishing a sole management system, there are opinions that the succession position has returned to square one.

According to the pharmaceutical and bio industry on the 15th, the succession structure of Hanmi Pharmaceutical Group had been solidified around CEO Lim Jong-yoon. Lim majored in biochemistry at Boston University in the United States, served as co-CEO (chairman of the board) of Beijing Hanmi Pharmaceutical Co., Ltd. in 2005, and was appointed as a director of Hanmi Pharmaceutical in 2009. Subsequently, with the transition to a holding company system in 2010, he took on the role of CEO of Hanmi Holdings, and since 2016, he has served as the sole CEO. Inside and outside the industry, there was a strong expectation that succession to CEO Lim was likely.

However, after the passing of former chairman Lim Seong-gi in August 2020, CEO Lim’s solo leadership structure began to shake rapidly. The shares held by the late chairman, excluding those donated to a public interest corporation, were inherited by his spouse Song Young-sook and their three children Lim Jong-yoon, Joo-hyun, and Jong-hoon in approximately a 2:1:1:1 ratio. Song Young-sook, as the largest shareholder holding the most shares, secured management control. She was appointed as the new chairman of Hanmi Pharmaceutical Group and, together with CEO Lim, took on the role of co-CEO of Hanmi Science, thereby overseeing both the holding company and the operating company.

With Song’s appointment as chairman, Lim Joo-hyun, then vice president of Hanmi Pharmaceutical and younger sibling of CEO Lim, joined Hanmi Science as an inside director, and in early last year, both Lim Joo-hyun and Lim Jong-hoon were promoted to presidents of Hanmi Pharmaceutical. Thus, all three siblings became presidents of Hanmi Pharmaceutical. Currently, Chairman Song holds 11.65% of Hanmi Science shares, CEO Lim holds 7.88%, and Lim Joo-hyun and Lim Jong-hoon, presidents of Hanmi Pharmaceutical and siblings of CEO Lim, hold 8.82% and 8.41%, respectively. Although the share differences among the three siblings are not large, CEO Lim actually holds the smallest share. Industry observers believe that Chairman Song made these decisions to strengthen her own management rights and to create a competitive succession structure.

At the upcoming Hanmi Science regular shareholders’ meeting scheduled for the 24th of this month, the agenda for CEO Lim’s reappointment was not submitted. If CEO Lim, whose term ends on the 15th, is not reappointed as an inside director at this shareholders’ meeting, he will be removed from the board and will naturally have to step down from the CEO position. With President Lim Joo-hyun also resigning from the inside director position, the succession structure appears to have effectively restarted from 'zero base.' It is known that there have been voices of opposition from CEO Lim’s side, but given the proximity to the shareholders’ meeting, it is realistically difficult for the reappointment agenda to be resubmitted.

As the management dispute surfaces, it is expected that the next stage will shift to the operating company, Hanmi Pharmaceutical. Since all three siblings maintain their positions as presidents of Hanmi Pharmaceutical, their demonstrated capabilities could serve as a gauge for the future succession structure. Hanmi Pharmaceutical stated regarding CEO Lim’s future plans, "He will focus on localizing European Hanmi and the Chinese business to establish a social enterprise model, and through open innovation, concentrate on overseas research and development such as vaccines that contribute to resolving global inequalities, dedicating efforts to creating future growth engines for Hanmi Pharmaceutical Group. Ultimately, he will also focus on the vast Chinese market and devote himself to the innovation of global Hanmi."

Meanwhile, regarding Chairman Song’s establishment of a sole management system, Hanmi Science explained, "This is a measure to resolve more issues through inside directors than outside directors, establishing an advanced ESG management system while maintaining Chairman Song’s position as CEO of Hanmi Science to implement responsible management." Chairman Song makes major group decisions, while day-to-day management issues are handled by a professional management system. Hanmi Pharmaceutical is led by professional CEOs Woo Jong-su and Kwon Se-chang.

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