'Namyang Dairy Products·Han&Co M&A Lawsuit' Fate Day on September 22... First Trial Verdict

Hong Won-sik, Chairman of Namyang Dairy Products / Photo by Dongju Yoon doso7@

[Asia Economy Reporter Kim Daehyun] The first trial verdict in the "300 billion KRW M&A lawsuit" between Namyang Dairy Products and Hahn & Company (Hahn & Co) will be announced on the 22nd of next month.

On the 23rd at 2 p.m., the Civil Division 30 of the Seoul Central District Court (Presiding Judge Jung Chan-woo) concluded all trial procedures during the 9th hearing of the stock transfer lawsuit filed by Hahn & Co against Namyang Dairy Products Chairman Hong Won-sik (72) and his family, stating, "The verdict will be delivered at 10 a.m. on September 22."

The court summoned three lawyers from Kim & Chang, who were in charge of the practical work during the M&A contract process, as witnesses, but they did not appear in court on this day as well, following their absence at the previous hearing.

The representative for Chairman Hong emphasized the issue of "dual representation" again in the final argument. According to the sales advisor's suggestion, Chairman Hong appointed lawyers from Kim & Chang as his M&A legal representatives, but Hahn & Co also appointed other lawyers from Kim & Chang.

He added, "It was a situation where the family business was being sold due to various circumstances," and "Chairman Hong, who had no M&A experience, made a significant mistake by failing to reflect family considerations and other matters in the contract." Furthermore, he stated, "If proper legal advice had been received, the contract would not have been drafted in that way," and added, "(The Kim & Chang) lawyers were effectively working for the plaintiff's side. This is the biggest problem with dual representation. Please examine this carefully."

On the other hand, Hahn & Co's position is that it is common for one law firm to represent both parties in an M&A, so there is no problem. Han Sang-won, President of Hahn & Co (51), also testified in court that when asked by Chairman Hong's side whether they had received a consent form for dual representation from Kim & Chang, "In 28 years, I have never received a consent form related to dual representation," and stated that Chairman Hong's side was also unaware in advance that Kim & Chang had been appointed.

Whether the "Baekmidang spin-off" and "family considerations" were discussed as preconditions for the transaction is also a point of contention. Chairman Hong has claimed that the suspension of the sale was due to the failure to meet prioritized conditions such as the spin-off of Baekmidang and the food service division, which were led by his wife, Advisor Lee Woon-kyung, and guarantees of consideration for family members including his two sons who are executives at Namyang Dairy Products. In contrast, Hahn & Co argues that Chairman Hong focused on raising the per-share purchase price and did not emphasize conditions such as Baekmidang from the beginning.

Previously, on May 27 of last year, Chairman Hong and his family signed a stock sales contract to sell 53.08% of Namyang Dairy Products shares to Hahn & Co for about 310.7 billion KRW. After the related details became known, expectations such as "resolving owner risk issues" acted as positive factors, causing Namyang Dairy Products' stock price to soar.

However, on September 1 of the same year, Chairman Hong notified the contract termination, claiming that Hahn & Company had not fulfilled the preconditions for the transaction. Subsequently, Hahn & Co filed three injunction applications, all of which were accepted by the court.

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