The legal battle between the sons of the founder of Hanmi Pharmaceutical -- Lim Jong-yoon and Lim Jong-hoon -- and the OCI Group has intensified. OCI Group holds a significant stake in Hanmi Science, the parent company of Hanmi Pharmaceutical Group. The legal battle remains on the question of integration.
According to legal sources on Feb. 21, the 31st Civil Affairs Division of the Suwon District Court convened the initial trial session of the injunction case initiated by Hanmi Pharmaceutical CEO Lim Jong-yoon and Hanmi Science CEO Lim Jong-hoon. This case aims to prohibit the new share issuance, opposing the integration between Hanmi Pharmaceutical Group and OCI Group.
On the same day, the Lim brothers asserted, “This new share issuance is not for the company’s management purposes but for the benefit of specific individuals, thus infringing upon the rights of share subscription and shareholders. Therefore, it should be deemed invalid.” They claimed that new share issuances should only be carried out for management purposes such as financial restructuring and should involve allocations to third parties. However, they alleged that the issuance by Hanmi Group was conducted not for such purposes but rather for personal motives, specifically their mother, Song Young-sook, who is the chairwoman of Hanmi Pharmaceutical Group, trying to take over control of the company.
Furthermore, they argued that conducting paid-in capital increases to third parties during a dispute over management rights, especially when family members hold similar stakes, should be deemed invalid. They pointed out that Hanmi Science’s financial structure is sound, indicating no urgent need for fundraising. Additionally, they highlighted differences between the business domains of OCI Group and pharmaceuticals.
In response, Hanmi Group’s legal representatives countered, stating, “The reality of the domestic pharmaceutical industry is small and challenging,” emphasizing, “To succeed with a single new drug, it requires 14 years of research and 1.8 trillion won in funding, necessitating capital expansion and strategic partnerships with other companies.” They argued that OCI Group is a suitable partner to receive financial support and maintain the company’s stability in the future. Additionally, they asserted that Hanmi could leverage OCI Group’s global sales network for product distribution.
Regarding the argument about the dispute of management rights, they drew a line, stating, “During the inheritance agreement, Chairwoman Song decided to acquire twice as many shares as the legal inheritance portion, while creditors received other assets instead. Therefore, it is rational to view Chairwoman Song’s governance rights as mutually agreed upon.” Moreover, they added that if the paid-in capital increase through the shareholder allocation method had been pursued forcibly, it would have made it difficult for CEO Lim Jong-yoon and Lim Jong-hoon to acquire the funds, considering financial circumstances, and would have resulted in losses for small shareholders.
On Jan. 12, Hanmi Group and the materials and energy company OCI Group signed an agreement to integrate through respective investments in kind and acquisitions of new share issuance. However, the Lim brothers opposed the integration and filed for an injunction against the issuance of new shares against Hanmi Science. Subsequently, they expressed their intention to return to management as representatives of Hanmi Pharmaceutical and Hanmi Science, respectively, thereby highlighting the visibility of the governance dispute between the owner family members.