Hong Won-sik, Chairman of Namyang Dairy Products, "Lawyer Urged Me to Draft Stock Trading Agreement"

[Image source=Yonhap News]

[Asia Economy Reporter Eunmo Koo] Hong Won-sik, chairman of Namyang Dairy Products, denied the validity of a contract, claiming that the lawyer who acted as legal counsel during the stock sale agreement process with the private equity firm Hahn & Company (Hahn & Co) deceived them by saying 'the negotiation details can be supplemented later.'

On the 21st, at a trial held before the Civil Division 30 of the Seoul Central District Court (Presiding Judge Jeong Chan-woo), Hong said about the contract, "It is just a kind of proposal, so what meaning would it have?" He appeared in court as a defendant in the stock transfer lawsuit filed by Hahn & Co and responded to questioning.

During the questioning, Hong’s legal representative asked, "Even on the contract day (May 27, 2021), since both parties had not reached an agreement, wasn’t it natural to think that the confirmation would be finalized before the transaction closing date after signing the contract?" Hong answered, "Yes."

Hong also claimed, "I found it strange why the lawyer in charge at the time was so pushy," adding, "Even if it was 2 to 3 days late, Namyang Dairy Products would not run away, so I cannot understand why they pressured so much."

Hahn & Co signed a stock purchase agreement (SPA) to buy shares of Namyang Dairy Products held by Hong and his family at 820,000 KRW per share, but after Hong’s side did not transfer the shares, Hahn & Co filed a stock transfer lawsuit in August last year.

Hong’s side raised issues that the contract did not include the promised Baekmidang business rights and executive privileges for Hong’s family, which were promised before the contract. However, they claim that Park, a lawyer from Kim & Chang law firm who handled the lawsuit at the time, said, "It can be supplemented later," leading them to stamp the contract.

Furthermore, Hong’s side argues that Kim & Chang law firm represented both Hong’s family and the counterparty Hahn & Co during the contract process, resulting in a conflict of interest that invalidates the contract. Hong reaffirmed this claim in court, emphasizing, "Park clearly said that the contract seal was conditional and that 'the contract terms can be changed later.'"

However, Hahn & Co’s legal representative pointed out, "If what the defendant (Hong) says is true, then (Park’s actions) constitute fraud and he should be disbarred," and questioned, "Why has there been no criminal action for over a year?"

In response, Hong’s legal representative stated, "Around September last year, the defendant strongly insisted on filing a complaint against lawyer Park, but many advised caution about escalating a civil matter into a criminal case, so no actual complaint was filed." Hong also agreed, saying, "That is correct."

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