The management control dispute at Hanmi Group that has continued since the death of founder and late Chairman Lim Sung-ki has entered a new phase.
Signs of a rift have emerged in the "four-party alliance" formed by largest shareholder Shin Dong-kuk, chairman of Hanyang Precision Co., Chair Song Young-sook of Hanmi Group and her daughter, Vice Chair Lim Joo-hyun, and private equity firm La Défense Partners, as second son Lim Jong-hoon, CEO of Hanmi Fine Chemical, transferred part of his equity to investors friendly to the mother and daughter, who have been seen as holding the casting vote in the management control battle.
With this equity transfer, some analysts say a structure has formed in which the founder family's friendly equity now leads Shin Dong-kuk's side. The industry is watching the conflict between Shin and the mother and daughter and the possibility of a future "vote showdown."
Shin Dong-kuk, a junior from Lim Sung-ki's hometown, rose to become the largest shareholder after the founder's death in 2020 by acquiring a large amount of equity as the owner family raised funds to pay inheritance taxes. In 2024, during the management control dispute, he first sided with the brothers, then formed a "four-party alliance" with the mother and daughter and La Défense, emerging as a key figure in Hanmi Group's control landscape.
◇ "Friendly equity shifts to the mother and daughter's side"…more variables for governance
Holding company Hanmi Science disclosed on the 2nd that CEO Lim Jong-hoon of Hanmi Fine Chemical would sell 2.5% (1,709,788 shares) of his 5.09% equity in Hanmi Science in an over-the-counter deal.
According to the industry, private equity firm NAU IB Capital will use the "NAU IB No. 22 Fund" to buy the equity. The transaction amount is 48,000 won per share, totaling 82.06982 billion won. The buyer is said to be friendly to Chair Song Young-sook and Vice Chair Lim Joo-hyun.
Previously, the industry buzzed that Shin Dong-kuk, chairman of Hanyang Precision Co., sought to raise funds and explore acquiring CEO Lim Jong-hoon's equity as part of reviewing ways to expand his control.
In fact, in Feb., Shin expanded his equity by purchasing all of Hanmi Group eldest son Chairman Lim Jong-yoon's personal equity in Hanmi Science and related corporate equity.
The equity transaction between CEO Lim Jong-hoon and Shin did not actually proceed, and with Lim choosing to hand it to the family (the mother and daughter), some expect the conflict between Shin and the founder's family to intensify.
Reflecting this equity change, the industry estimates friendly equity on Shin Dong-kuk's side at about 29.83% and the mother and daughter, CEO Lim's family, and friendly equity at about 31.05%. As the gap is small, even a 2%–3% equity shift could significantly affect the future voting power structure, analysts say.
CEO Lim had previously fought a management control dispute alongside his brother against the mother and daughter, but this time publicly said he would carry on the founder's will with his mother and sister. In a separate statement, Lim said, "This is a decision reached after careful consideration to carry on my father's management philosophy and the spirit of contributing to the nation through pharmaceuticals," adding, "I will do everything I can with my mother, Chair Song Young-sook, and my sister, Vice Chair Lim Joo-hyun, to help the company's development."
◇ 60 billion won lawsuit and scrapped senior care project…events that fueled friction in the four-party alliance
The market sees Shin's involvement in managing Hanmi Pharmaceutical and Hanmi Science and his successive equity increases as the decisive trigger that weakened trust within the four-party alliance and escalated tensions.
Shin issued exchangeable bonds (EB) using his equity as collateral, and then made additional equity purchases.
The mother and daughter and La Défense argue this was a de facto attempt to expand control in violation of the shareholders' agreement and filed a lawsuit seeking a 60 billion won penalty. Shin's side counters that the moves were necessary financing and investment decisions for management and did not violate the agreement.
The trial has concluded arguments and awaits a ruling, and the outcome is expected to significantly affect the four-party alliance's future relations.
One case where the two sides directly clashed is the Banpo senior care project.
Hanmi Group pursued a senior care project in Seoul's Banpo area that linked a silver town, a hospital, and healthcare services using the site, but the plan was halted after Shin's side raised objections over the investment structure and business direction during the process.
The mother and daughter argue that Shin reversed a prior agreement, while Shin's side says the project was withdrawn after sufficient review of its business feasibility. The project's derailment is one of the key issues in the ongoing penalty lawsuit.
◇ Potential for escalating tensions around 2029
The shareholders' agreement among Chair Song Young-sook and Vice Chair Lim Joo-hyun, Chairman Shin Dong-kuk, and La Défense remains in place. It includes joint exercise of voting rights and consultation on major management decisions, so it does not immediately allow unilateral decisions or vote showdowns.
The shareholders' agreement is said to run until 2029. The industry expects joint voting to continue while the agreement remains, but says it cannot rule out the possibility that the management control dispute will resurface after it expires.
With CEO Lim Jong-hoon's equity sale forming a structure where friendly equity centered on the founder's family leads Shin's side, the industry expects a considerable impact on future governance changes. Some also say the founder family's influence could grow further as Lim publicly said he would stand with Chair Song Young-sook and Vice Chair Lim Joo-hyun.
An industry official said, "This transaction is not a simple equity sale but a symbolic event that shows the future direction of the management control landscape," adding, "Even while the agreement remains, internal dynamics within the alliance can change, and after it ends, discussions on governance restructuring could pick up in earnest."