Will Owner Risk Be Resolved... 'Namyang Dairy M&A Lawsuit' First Trial, Hahn&Co Wins

Hong Won-sik, Chairman of Namyang Dairy Products / Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kim Daehyun] In the first trial of the '300 billion KRW M&A lawsuit' between Namyang Dairy Products and Hahn & Company (Hahn & Co), Hahn & Co won. If the ruling is finalized, the major shareholder of Namyang Dairy Products will change from Chairman Hong to Hahn & Co.

At 10 a.m. on the 22nd, the Seoul Central District Court Civil Division 30 (Presiding Judge Jung Chan-woo) ruled in favor of Hahn & Co in the first trial of the stock transfer lawsuit filed against Hong Won-sik, Chairman of Namyang Dairy Products (72), and his family, stating that "Chairman Hong and his family must transfer the shares to Hahn & Co." The court also ordered the litigation costs to be borne by Chairman Hong and his family.

The court stated, "The stock sale contract between both parties was concluded," and "The defendant's claim that the contract should be terminated due to 'dual agency' is not accepted."

The court did not accept Chairman Hong's repeated 'dual agency' argument. Chairman Hong's side argued that the contract was flawed because, following the suggestion of the sales advisor, they appointed a lawyer from Kim & Chang as the M&A legal representative, but Hahn & Co also appointed another lawyer from Kim & Chang. On the other hand, Hahn & Co argued that it is common for one law firm to represent both parties in an M&A, so there is no problem.

Chairman Hong's claims that preconditions such as the 'Baekmidang spin-off' and 'family privileges' were not met were also rejected. Chairman Hong argued that the background for halting the sale was that the conditions he prioritized?such as the spin-off of Baekmidang and the dining business division, which was led by his wife, Advisor Lee Un-kyung, and the guarantee of privileges for family members including his two sons who are executives at Namyang Dairy Products?were not fulfilled. Hahn & Co, however, stated that Chairman Hong focused on raising the per-share purchase price and did not emphasize conditions like Baekmidang from the beginning.

Previously, on May 27 of last year, Chairman Hong and his family signed a stock sale contract to sell 53.08% of Namyang Dairy Products shares to Hahn & Co for about 310.7 billion KRW. After the 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 termination of the contract, claiming that Hahn & Company did not fulfill 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.