Namyang Dairy Owner Family Loses Management Rights Dispute... Supreme Court Orders Transfer of Shares

Han & Company "Chairman Hong Won-sik, Must Respect Supreme Court Ruling" Statement

Hong Won-sik, chairman of Namyang Dairy Products, is making a public apology regarding the controversy caused by the announcement that the company's dairy product, Bulgari, has an effect on suppressing COVID-19. The apology took place in May 2021 at the main auditorium of Namyang Dairy Products headquarters on Dosan-daero, Gangnam-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

Hong Won-sik, chairman of Namyang Dairy Products, and his family owners have ultimately lost the management rights dispute lawsuit. As a result, after about two and a half years of litigation, the private equity firm Hahn & Company has secured the management rights of Namyang Dairy Products.

The Supreme Court's 2nd Division (Presiding Justice Cheon Dae-yeop) on the 4th dismissed the appeal filed by Chairman Hong's side in the final appeal of the stock transfer contract enforcement lawsuit filed by Hahn & Company against the Hong family, confirming the lower court's ruling to enforce the stock transfer contract signed with Hahn & Company. Accordingly, Chairman Hong, his wife, and grandson must transfer their combined 52.63% stake in Namyang Dairy Products to Hahn & Company.

The lawsuit between the family owners and Hahn & Company over the management rights of Namyang Dairy Products began in 2021, when COVID-19 was spreading in earnest. At that time, Namyang Dairy Products caused social controversy by falsely announcing that its product Bulgari had a COVID-19 suppression effect. This is known as the so-called 'Bulgari Incident.' In May of that year, Chairman Hong issued a public apology and announced his resignation to take responsibility for the incident. Subsequently, Chairman Hong's side signed a stock sale contract to transfer the shares of Namyang Dairy Products held by the family to Hahn & Company.

However, about four months later, Chairman Hong's side notified the contract termination, claiming that Hahn & Company did not fulfill the contract terms such as 'executive treatment' for Chairman Hong and his wife. They also raised issues regarding Kim & Chang law firm representing both parties during the contract process. In response, Hahn & Company immediately filed a lawsuit to enforce the stock sale contract.

Both the first and second trials ruled in favor of Hahn & Company. The first trial court ordered the Hong family to transfer their shares in Namyang Dairy Products to Hahn & Company as per the contract and required Chairman Hong's side to bear the litigation costs. Chairman Hong's side appealed but was dismissed in the second trial. On this day, the Supreme Court also found no error in the lower court's conclusion and dismissed the appeal, bringing the Namyang Dairy Products management rights dispute to a close.

Hahn & Company issued a statement immediately after the ruling, saying, "We welcome the Supreme Court's decision" and "We expect Chairman Hong's side to respect the Supreme Court's ruling."

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