Dismissal of Korea-US OCI Merger 'New Share Issuance Prohibition Injunction'... The Main Game is the General Meeting on the 28th

Court: "Need for Capital Partnership with OCI Exists"
Board Election Vote Battle Remains on 28th
Both Sides Make Final Push to Rally Votes

The preliminary injunction request filed by brothers Im Jong-yoon and Jong-hoon to prohibit the third-party new share issuance by Hanmi Science, aimed at severing the key link in the integration of Hanmi Pharmaceutical Group and OCI Group, was dismissed by the court on the 26th, removing the first obstacle to the integration of the two groups.

[Photo by Hanmi Pharm]

However, the dispute remains shrouded in uncertainty as the continuation of the new share issuance depends on which side?the mother and daughter (Song Young-sook, Chairwoman of Hanmi Pharmaceutical Group, and Im Joo-hyun, President of Hanmi Science) or the brothers?holds the majority on the board of directors at the upcoming Hanmi Science regular shareholders' meeting on the 28th.

The new share issuance, which is the subject of the brothers' injunction, is one of the three main links for the Hanmi-OCI integration. Earlier in January, Hanmi Science and OCI Holdings announced a package deal including the third-party new share issuance by Hanmi Science to OCI Holdings, which is the subject of this injunction, as well as ▲the sale of shares by the mother and daughter side ▲the contribution in kind of Hanmi Science shares by the mother and daughter side to OCI Holdings ▲and a third-party allotment capital increase by OCI Holdings to the mother and daughter side. Through this, the plan was for Hanmi Science to be incorporated as an intermediate holding company of OCI Group while President Im would continue to maintain management rights over Hanmi Pharmaceutical Group.

In response, the brothers filed the injunction claiming it was for personal gain to secure funds for inheritance tax. However, the court saw "the necessity of raising operating funds, improving financial structure, and the need for a strategic capital alliance to establish a foundation for long-term research and development (R&D) investment." Regarding the strengthening of management rights, the court also stated, "Even if there is a subsidiary purpose of defending management rights, it is difficult to conclude that it was done in a manifestly unfair manner."

Since this decision is a preliminary injunction, there remains a possibility of reversal in the main lawsuit, but legal circles generally agree that if the new share issuance occurs before the first trial ruling in the main lawsuit, it would be difficult to retroactively overturn it.

Following the dismissal of the injunction, the brothers must now take control of the Hanmi Science board of directors, the holding company of Hanmi Pharmaceutical Group, to cancel the new share issuance in order to block the integration. Currently, the Hanmi Science board consists of four members from the mother and daughter side. The brothers have submitted a shareholder proposal to appoint a total of five members, including themselves, at this week's shareholders' meeting. The mother and daughter side responded by appointing six additional directors, the maximum number allowed under the articles of incorporation. The controlling faction of the board could change depending on who wins at the shareholders' meeting.

The brothers secured Shin Dong-guk, Chairman of Hanyang Precision and the largest individual shareholder, as an ally, gaining an advantage in shareholding over the mother and daughter side. Both sides are making a final all-out effort to win the votes of minority shareholders, including the National Pension Service (7.91%). The mother and daughter side emphasized that the dismissal of the injunction strengthens the legal legitimacy of the merger and are working to win over the National Pension Service and minority shareholders. Meanwhile, the brothers are hopeful that winning the shareholders' meeting will allow them to overturn the deal.

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