"Adding Two Directors Is Not a Hostile M&A"

Published 22 Sep.2025 16:00(KST)

Injunction Request by Chairman Yoon Donghan and His Daughter Dismissed

The court has dismissed the injunction request filed by Yoon Donghan, Chairman of Kolmar Group, and Yoon Yeowon, CEO of Kolmar BNH. In the hostile merger and acquisition (M&A) dispute, the court sided with Yoon Sanghyun, Vice Chairman of Kolmar Holdings. Chairman Yoon is the father of both Vice Chairman Yoon and CEO Yoon, and Vice Chairman Yoon and CEO Yoon are siblings.

Yoon Donghan, Chairman of Kolmar Group. Photo by Yonhap News Agency

On September 19, the 21st Civil Division of the Daejeon District Court (Presiding Judge Kim Sunhan) dismissed the application for an injunction to suspend the effect of the resolution (2025Kahap50316) filed by Chairman Yoon and CEO Yoon against Kolmar Holdings, stating that "there is no merit."

With the court's decision, Vice Chairman Yoon can now participate in the Kolmar BNH extraordinary shareholders' meeting on September 26 without concern. At the meeting, the appointment of Vice Chairman Yoon and former CJ CheilJedang Executive Vice President Lee Seunghwa as inside directors is expected to be discussed.

During the injunction hearing held on September 17, the parties representing Chairman Yoon and CEO Yoon, and Kolmar Holdings, clashed over whether the situation constituted a hostile M&A. Chairman Yoon and CEO Yoon's side argued, "Kolmar Holdings is attempting to restructure the board of Kolmar BNH without regard for the management's intentions, which constitutes a hostile M&A," adding, "The criterion for determining a hostile M&A is whether the action goes against the will of the management rather than the majority shareholder."

Kolmar Holdings countered, "A hostile M&A refers to the acquisition of corporate control without consultation with the existing major shareholder," and questioned, "How can it be a hostile M&A if the largest shareholder (Kolmar Holdings) is simply adding two more directors?" They further argued that Article 31, Paragraph 2, Item 2 of the Kolmar BNH Articles of Incorporation does not intend to restrict the exercise of shareholder rights by Kolmar Holdings.

The Kolmar BNH Articles of Incorporation stipulate a supermajority resolution requirement, meaning that the appointment of new directors through a hostile M&A requires the approval of at least two-thirds of the total issued shares. Kolmar Holdings is the largest shareholder of Kolmar BNH, holding a 44.63% stake. CEO Yoon holds a 7.78% stake in Kolmar BNH, while Vice Chairman Yoon owns 31.75% of Kolmar Holdings.

The two sides also debated the validity of the supermajority resolution system itself. Kolmar Holdings asserted, "The supermajority system infringes on the will of the majority of shareholders and violates the principle of shareholder equality." In contrast, Chairman Yoon and CEO Yoon's side countered, "There have been several rulings stating that the supermajority system cannot be deemed invalid."

The supermajority resolution system is a provision in the articles of incorporation that requires a higher threshold for resolutions than a special resolution at the shareholders’ meeting. The Kolmar BNH Articles of Incorporation impose stricter requirements than the Commercial Act, thus qualifying as a supermajority system. Article 434 of the Commercial Act requires a special resolution for amending the articles of incorporation, which is defined as the approval of at least two-thirds of the voting rights of shareholders present and at least one-third of the total issued shares.