A court has ruled that former Namyang Dairy Products Chairman Hong Won-sik must pay 66 billion won in damages to private equity fund manager Hahn & Company (Hahn & Co.) for delaying the acquisition.
The Seoul Central District Court Civil Agreement Division 31 (Presiding Judge Nam In-su) on the 27th ruled partially in favor of the plaintiff in a damages suit Hahn & Company filed against former Chairman Hong.
The court said, "Defendant Hong Won-sik shall pay the plaintiff damages amounting to 66 billion won," and added, "Two-fifths of the litigation expense incurred between the plaintiff and Hong Won-sik shall be borne by the plaintiff, and the remainder by the defendant."
The dispute between Hahn & Company and the former chairman dates back to 2021. In May of that year, Hahn & Company signed a stock purchase agreement (SPA) to acquire a 53.08% equity stake held by the former chairman's side. However, three months later, the former chairman's side abruptly notified termination of the contract, saying "Hahn & Company improperly interfered in company management."
Hahn & Company immediately filed a lawsuit to enforce the stock transfer agreement against the former chairman's side, and only on Jan. 4 last year won a final victory at the Supreme Court. On the 30th of the same month, Hahn & Company transferred 310 billion won as consideration for the equity acquisition to the former chairman's side and took management control.
This ruling is the result of a lawsuit filed to recover damages caused by the delay in Hahn & Company's acquisition of Namyang Dairy Products because the former chairman refused to hand over management control until the end. Hahn & Company filed a 50 billion won damages suit against the former chairman in Nov. 2022, but in May this year increased the claim to 93.6 billion won. In this ruling, about 70% of that amount was recognized as damages.
Hahn & Company also sought damages from the former chairman's spouse, former Namyang Dairy Products adviser Lee Un-gyeong, and a grandson, a person surnamed Hong, but this was not accepted.