In a ruling on a $600 million penalty lawsuit filed by the Hanmi Pharmaceutical Group's owners over the rejection of a board agenda related to the senior care business, the court sided with Shin Dong-guk, the chairman of the company. Chairwoman Song Young-sook and Vice Chairman Im Joo-hyun plan to appeal the first-instance ruling.
The Seoul Central District Court's Civil Division 30, presided over by Judge Kim Seok-beom, ruled on October 1 that the lawsuit filed by Song Young-sook, Im Joo-hyun, and the special purpose company Killington LLC against Chairman Shin was dismissed.
The court determined that the prior resolutions made before the final board meeting constituted conditional approvals. It also stated that subsequent resolutions were aimed at confirming investment decisions and could not be interpreted as a need to reconvene the board to address new issues.
The court explained, "The agreement between both parties to present the investment decision as an agenda item for the target company's board meeting cannot be seen as exceeding the scope of their agreement." Furthermore, it found no evidence to suggest that a definitive agreement was reached to invest in the business beyond the initial agreement.
In July 2024, Chairwoman Song and Vice Chairman Im formed a so-called 'four-party alliance' with Chairman Shin and the Killington Partners. This alliance established a shareholder agreement regarding joint voting rights and major management decisions, stipulating a $600 million penalty for any violations.
Following this, Song and Im's side pursued the senior care business. Tensions arose when Chairman Shin opposed the project. On June 5 of last year, the Hanmi Science board conditionally approved a $16 million investment in the senior residence project in Banpo-dong, Seocho-gu, contingent on active cooperation from Seoul St. Mary's Hospital.
However, on June 10, the board reconsidered the agenda and withdrew the previous investment decision, citing difficulties in securing specific commitments from the hospital, concerns over prolonged investment recovery, and challenges in attracting additional investors.
In response, Song and Im accused Chairman Shin of presenting the investment agenda for reconsideration without their agreement and of violating the shareholder agreement by voting against it.
Immediately following the ruling, Shin's side issued a statement expressing confidence in the facts and legal principles, stating, "There was no reason to escalate unnecessary disputes. We will take responsible steps to ensure that board-centered management and a professional management system are firmly established as a result of this ruling."
Chairwoman Song Young-sook and Vice Chairman Im Joo-hyun are expected to appeal the first-instance ruling. Legal experts anticipate further disputes regarding the interpretation of conditional approvals and the scope of the shareholder agreement.
The Seoul Central District Court's Civil Division 30, presided over by Judge Kim Seok-beom, ruled on October 1 that the lawsuit filed by Song Young-sook, Im Joo-hyun, and the special purpose company Killington LLC against Chairman Shin was dismissed.
The court determined that the prior resolutions made before the final board meeting constituted conditional approvals. It also stated that subsequent resolutions were aimed at confirming investment decisions and could not be interpreted as a need to reconvene the board to address new issues.
The court explained, "The agreement between both parties to present the investment decision as an agenda item for the target company's board meeting cannot be seen as exceeding the scope of their agreement." Furthermore, it found no evidence to suggest that a definitive agreement was reached to invest in the business beyond the initial agreement.
In July 2024, Chairwoman Song and Vice Chairman Im formed a so-called 'four-party alliance' with Chairman Shin and the Killington Partners. This alliance established a shareholder agreement regarding joint voting rights and major management decisions, stipulating a $600 million penalty for any violations.
Following this, Song and Im's side pursued the senior care business. Tensions arose when Chairman Shin opposed the project. On June 5 of last year, the Hanmi Science board conditionally approved a $16 million investment in the senior residence project in Banpo-dong, Seocho-gu, contingent on active cooperation from Seoul St. Mary's Hospital.
However, on June 10, the board reconsidered the agenda and withdrew the previous investment decision, citing difficulties in securing specific commitments from the hospital, concerns over prolonged investment recovery, and challenges in attracting additional investors.
In response, Song and Im accused Chairman Shin of presenting the investment agenda for reconsideration without their agreement and of violating the shareholder agreement by voting against it.
Immediately following the ruling, Shin's side issued a statement expressing confidence in the facts and legal principles, stating, "There was no reason to escalate unnecessary disputes. We will take responsible steps to ensure that board-centered management and a professional management system are firmly established as a result of this ruling."
Chairwoman Song Young-sook and Vice Chairman Im Joo-hyun are expected to appeal the first-instance ruling. Legal experts anticipate further disputes regarding the interpretation of conditional approvals and the scope of the shareholder agreement.
* This article has been translated by AI.
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