The Seoul Bankruptcy Court has decided to initiate corporate rehabilitation proceedings for Dong Sung Bio Pharm, which is in a management rights dispute. Accordingly, Dong Sung Bio Pharm will receive a grace period for debt repayment and is expected to embark on management normalization under court guidance.
On the 23rd, the Seoul Bankruptcy Court announced that it would commence rehabilitation proceedings for Dong Sung Bio Pharm. The court appointed Na Won-kyun, the representative of Dong Sung Bio Pharm, and a third party, Mr. Kim In-soo, as co-administrators. In the future, decisions regarding major management will be made by these administrators rather than the board of directors.
Previously, the company applied to the court for the commencement of rehabilitation proceedings in May. Amid ongoing management difficulties due to poor business performance, the second-generation owner, Lee Yang-koo, who had stepped down from the management front at the end of last year, started a management rights dispute against the current manager and his nephew, Na Won-kyun.
In April, Lee Yang-koo declared that he would regain management rights by transferring his shareholding to a mysterious marketing company, Brand Refactoring. With Na's equity being only 4.1%, the company urgently applied to the court for the commencement of rehabilitation proceedings. Given the conflict, they utilized the rehabilitation process as a defense mechanism for management rights, and the court's acceptance allowed the current management to buy time. The court ordered the submission of the rehabilitation plan by October 13.
Meanwhile, Chairman Lee Yang-koo and the new largest shareholder, Brand Refactoring, have filed a complaint against the current management, including Na, for embezzlement and breach of trust. They claim that Na and others embezzled 17.7 billion won of company funds between October of last year and May by providing advance payments or loans to major business partners.
In response, the company stated, "We have received the complaint, but the accuser's claims are baseless," adding, "We plan to respond actively through legal proceedings."