Former Blue House senior civil affairs secretary Woo Byung-woo is set to be appointed as an outside director at Dongwha Pharm. Outside directors oversee corporations' compliance management. Woo, the former secretary, was implicated in the state capture scandal, had his prison sentence finalized by the Supreme Court, and was later pardoned under the Yoon Suk-yeol administration.
According to the pharmaceutical industry on the 25th, Dongwha Pharm plans to put forward an agenda item at next month's shareholders meeting to appoint the former secretary as an outside director. If the item passes at the shareholders meeting, the former secretary will begin a three-year term. Among the outside directors, the former secretary will serve on the audit committee as an audit committee member. A Dongwha Pharm official said the company moved to consider the appointment "based on legal capabilities and expertise."
The former secretary, a Seoul National University law graduate, passed the bar exam at age 20 and rose to senior civil affairs secretary in his late 40s. The former secretary received a finalized one-year prison sentence from the Supreme Court in Sept. 2021 over the state capture scandal. The charge of dereliction of duty for condoning Choi Seo-won's (formerly Choi Soon-sil) state capture was acquitted, while the charge of abuse of power for unlawfully surveilling former special inspector Lee Seok-su and others resulted in a conviction. The former secretary was reinstated through a New Year's special pardon under the Yoon Suk-yeol administration at the end of the following year.
The pharmaceutical industry views the move to appoint the former secretary as an outside director at Dongwha Pharm as unusual. Outside directors check unilateral decisions by managers and oversee compliance management. Some say the appointment reflects a growing tendency among corporations to recruit former officials from oversight bodies to prepare for various contingencies.
Founded in 1897, Dongwha Pharm is Korea's oldest pharmaceutical company. Its over-the-counter drugs such as the digestive Hwalmyungsoo, the wound treatment Fucidin, and the cold medicine PANCOLD are well known. At the time, a palace herald combined Western medicine with a royal household secret remedy to create Hwalmyungsoo. Hwalmyungsoo recorded cumulative sales of 62 billion won in the third quarter last year.
Dongwha Pharm has yet to surpass 500 billion won in sales. Last year's consolidation sales at Dongwha Pharm were 496.4 billion won, up 7% from the previous year. Operating profit was 260 million won, down 98% from the previous year. Experts say the company needs to find new growth engines through active new drug development.