Court accepts Hahn & Co’s request to block Hong family’s share sale Wednesday’s ruling likely to impact main case against Namyang Dairy chairman

Translated by Ryu Ho-joung 공개 2022-01-28 08:10:48

이 기사는 2022년 01월 28일 08:08 더벨 유료페이지에 표출된 기사입니다.

A South Korean court has sided with Hahn & Company in a recent ruling that is likely to enable the Seoul-based private equity firm to gain the upper hand in the legal fight with Hong Won-sik, owner and chairman of Namyang Dairy Products.

On Wednesday, the Seoul Central District Court accepted Hahn & Co’s request to block the sale of shares in the dairy firm held by Hong and his wife and grandson to Dayou Winia Group.

Hahn & Co filed the injunction suit in early December last year shortly after the Hong family signed a conditional agreement with Dayou Winia Group in November to sell their majority stake in the company. Under the agreement, the three Namyang shareholders agreed to sell their shares to Dayou Winia Group if they win the legal dispute with Hahn & Co.

The deal came as a surprise to many as it was announced in the midst of an ongoing legal battle between Hahn & Co and the Hong family, which in May signed a deal to offload their stakes to the private equity firm and abruptly pulled out two months later.

In the hearing on January 7, a Yoon & Yang lawyer representing Hahn & Co said that the lawsuit was filed to prevent Hong from doing such an act again and also to prevent any negative impact on the dairy company.

A LKB& Partners lawyer for Hong responded by claiming that there was a side agreement between the Namyang chairman and Hahn & Co with text messages between Hong and PH & Company chairman Phillip Ham, who brokered the deal between Hong and Hahn & Co, submitted as evidence.

Hong’s lawyer also accused law firm Kim & Chang of failing to get the chairman’s consent in advance to represent both him and the private equity firm in the deal and committing breach of trust.

However, the court rejected most of the arguments set forth by Hong’s lawyer, according to a source familiar with the lawsuit. This is likely to have impact on the main case brought by Hahn & Co against the Hong family in August. The next hearing for the main case is scheduled for February 24.

This is the third time that Hong lost a case against Hahn & Co. In September last year, Hahn & Co won a court ruling to block a share sale by the Hong family to a third party. Namyang then announced a plan to hold an extraordinary shareholders meeting in October. In response, Hahn & Co filed a request to ban the Hong family from exercising their voting rights, which was accepted by the court. (Reporting by Gyoung-tae Kim)
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