by Jang Hyowon
Published 25 Mar.2024 11:54(KST)
The Korea ESG Evaluation Institute, which analyzes domestic shareholder meeting agendas, expressed support for the shareholder proposal put forth by the sons of the founder, brothers Lim Jong-yoon and Jong-hoon, regarding the director appointment agenda submitted to the Hanmi Science shareholders' meeting.
Currently leading the management of the Hanmi Pharmaceutical Group, founder's spouse Chairwoman Song Young-sook and daughter CEO Lim Joo-hyun signed an integration contract with OCI Group in January and proposed an agenda to appoint six new directors at the Hanmi Science regular shareholders' meeting scheduled for the 28th. In response, the eldest and second sons, Presidents Lim Jong-yoon and Jong-hoon of Hanmi Pharmaceutical, opposed the integration and also proposed the appointment of five directors as a shareholder proposal.
On the 25th, the Korea ESG Evaluation Institute released an analysis report on the Hanmi Science shareholders' meeting agenda, stating, "The integration contract led by the mother and daughter side lacks procedural legitimacy, and the management capabilities of CEO Lim Joo-hyun and OCI Group Chairman Lee Woo-hyun, who were recommended as inside directors, are also questionable," adding, "It is reasonable to support the brothers' proposal from the perspective of enhancing corporate and shareholder value."
Regarding the procedural legitimacy of the integration, the ESG Evaluation Institute stated, "The major shareholders, brothers Lim Jong-yoon and Jong-hoon, were excluded from the integration discussions and learned about it belatedly through media reports. At the time of the integration resolution, outside directors of Hanmi Science also claimed they did not receive sufficient explanation about the integration package deal and believed it was simply for funding needs."
Due to these issues, the ESG Evaluation Institute diagnosed that Shin Dong-guk, President of Hanyang Precision and the largest individual shareholder (with a 12.15% stake), also appears to have joined the brothers' voting side.
The ESG Evaluation Institute also raised doubts about the management capabilities of CEO Lim Joo-hyun of Hanmi Pharmaceutical and Chairman Lee Woo-hyun of OCI Group, who will lead the integrated OCI Group that effectively merges Hanmi Pharmaceutical Group. Since joining Hanmi Pharmaceutical management, CEO Lim has mainly been in charge of talent development and has not been sufficiently verified for management capabilities. Especially during this period, more than 20 key R&D personnel left Hanmi Pharmaceutical en masse, the ESG Evaluation Institute pointed out.
Furthermore, Chairman Lee Woo-hyun, who was recommended as an inside director of Hanmi Science this time, took over management after OCI Group acquired Bukwang Pharmaceutical. However, the institute analyzed that the company's sales decreased by 34% last year, operating losses reached 36.5 billion KRW, and the stock price plummeted.
The institute also pointed out that Chairman Lee was convicted in April 2011 of unfair stock trading charges for trading OCI shares using insider information while serving as OCI Vice President in 2007, receiving a sentence of 1 year and 6 months in prison with a 2-year probation and a fine of 1 billion KRW.
In contrast, President Lim Jong-yoon of Hanmi Pharmaceutical majored in biochemistry at Boston University in the United States, successfully pioneered Beijing Hanmi Pharmaceutical Co., Ltd., and has been sufficiently verified for management capabilities through his roles as Hanmi Pharmaceutical BD (Business Development) General Manager and CEO of Hanmi Science, the ESG Evaluation Institute stated.
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