'Management Disputes' and 'Leadership Changes'... Turbulence at Pharmaceutical Bio Shareholders' Meetings

March Regular Shareholders' Meeting Season
Major Issues Follow One After Another This Year

The March regular shareholder meeting season, which serves as a 'hearing' on the performance of major domestic listed companies last year and their outlook for this year, is beginning. In previous years, the pharmaceutical and bio industry shareholder meetings were smooth and quiet, but this year, significant issues such as management disputes and leadership changes are expected to make the meetings lively and contentious.

Hanmi Pharmaceutical Headquarters View
[Photo by Hanmi Pharmaceutical]

The Hanmi Science shareholder meeting draws the most attention. A vote battle between a mother and daughter versus sons is expected at the meeting. The owner family members, brothers Lim Jong-yoon and Jong-hoon, have opposed the integration efforts promoted by the Hanmi Pharm Group and OCI Group. Last month, the brothers filed an injunction to prohibit the issuance of new shares by Hanmi Science, a key link in the integration, starting a legal dispute.

At this shareholder meeting, the brothers have submitted a shareholder proposal requesting their appointment as inside directors of Hanmi Science, and the appointment of four others, including Kwon Kyu-chan, CEO of DXVX, as non-executive and outside directors. They also filed an injunction to have the agenda item included and to allow inspection and copying of the shareholder register. Since Hanmi Science has not yet announced the shareholder meeting, there is a possibility that the shareholder proposal may not be included, and this is seen as a measure to secure legal stability.

Yuhan Corporation has submitted a proposal to amend the articles of incorporation to create chairman and vice chairman positions at the shareholder meeting on the 15th. The company explains, "We will not appoint a chairman or vice chairman immediately," but on internal bulletin boards, there are reactions such as "This is groundwork for a specific person to become chairman," "An attempt to privatize the company," and "Endless greed."

In the over 100-year history of Yuhan Corporation, only two people have held the title of chairman: the founder Dr. Yuhan and advisor Yeon Man-hee. Since Dr. Yuhan decided on social return of the company in his will, no specific person has taken control of the company. Yuhan Corporation explains this as a "proactive rank flexibility measure to advance as a global pharmaceutical company," noting that with Kim Yeol-hong, the head of R&D, joining, the number of presidents increased to two, and the number of vice presidents increased to six, making this a "future-oriented measure" in line with the company's growth. Kim, who recently joined Yuhan, is also expected to be appointed as an inside director at this shareholder meeting.

Sungsoo Park, Vice President of Daewoong Pharmaceutical [Photo by Daewoong Pharmaceutical]

Some companies are scheduled for leadership changes. Daewoong Pharmaceutical will hold a shareholder meeting on the 28th to appoint inside directors Lee Chang-jae, Park Eun-kyung, and Cho Young-min. Among the co-CEOs Lee Chang-jae and Jeon Seung-ho, only Lee will be reappointed. Jeon, who became CEO at age 43 in 2018, achieved the milestone of Daewoong Pharmaceutical's annual sales exceeding 1 trillion won in his first year. Jeon's retirement is interpreted by the pharmaceutical industry as reflecting Daewoong's preference for younger executives. The company explains this as personnel aligned with the "three-year renewable term" ideal for CEOs. Jeon will continue as CEO of Daewoong Investment and Apicell Therapeutics.

Jeon's position will be filled by Park Sung-soo, the general vice president in charge of Nabota. Park, born in 1976, will become CEO in his 40s. He has led the botulinum toxin Nabota business, Daewoong's next-generation growth engine, since 2015. The appointment of Park Eun-kyung, born in 1983, as an inside director and a woman in her 40s also draws attention. As Daewoong Pharmaceutical's assets are expected to exceed 2 trillion won this year, this is also seen as a preemptive response to the Capital Market Act's regulation that the board of directors cannot be composed entirely of men or women.

Some companies are influenced by next month's National Assembly general election. Samsung Biologics, which will hold its shareholder meeting on the 15th, had no special agenda other than the usual approval of financial statements and director remuneration limits, but added a proposal to appoint former Minister of Land, Infrastructure and Transport Seo Seung-hwan as an outside director. This replaces former outside director Ahn Do-gul, former Vice Minister of Strategy and Finance, who is running as a Democratic Party candidate in the general election.

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