Hanmi Science minority shareholders back Shin and mother-daughter coalition < Pharma < Article

The Minority Shareholders Alliance of Hanmi Science announced its support for the coalition led by Chairwoman Song Young-sook, Song’s daughter and Vice Chairwoman Lim Ju-hyun, and Hanyang Precision Chairman Shin Dong-guk, the largest single shareholder outside the family.

Minority Shareholders Alliance of Hanmi Science announced their support for the coalition led by Chairwoman Song Young-sook, Song’s daughter and Vice Chairwoman Lim Ju-hyun, and Hanyang Precision Chairman Shin Dong-guk. (Screen captured from Hanmi Science homepage)

The alliance, which previously supported the brother faction and Chairman Shin during the regular shareholders’ meeting in March, cited continued stock price deterioration under the brothers’ management as a key factor in their decision to change allegiance.

The announcement came following a meeting between Shin and minority shareholders on Thursday, where the alliance expressed their newfound confidence in Shin’s alignment with minority shareholders’ interests.

The alliance particularly noted the inheritance tax issue that currently affects the Hanmi Group founder family.

The owner family of Hanmi Group inherited approximately 1 trillion won ($727 million) worth of stock from the late founder, Lim Sung-ki, who passed away in August 2020. The family was levied an inheritance tax totaling 540 billion won.

“Unless the inheritance tax issue is resolved, the overhang issue cannot be addressed, and it will remain a barrier to stock price growth,” Hanmi Science Minority Shareholders Alliance leader Lee Jun-yong said. “Therefore, checking the extent to which inheritance tax payments have been made is an important matter.”

According to disclosures and reports by shareholder alliances, it has been identified that the brothers —Hanmi Science Director Lim Jong-yoon and Hanmi Science CEO Lim Jong-hoon—are burdened with an excessive level of debt, around 200 billion won each, which is difficult to manage, including buyback agreements and loans.

“Notably, President Lim Jong-yoon’s assets, including stocks, have even been seized due to the unpaid loans of Vice Chairman Lim Ju-hyun,” Lee said. “In contrast, the mother and daughter are believed to be capable of resolving the inheritance tax independently through a stock purchase agreement with Chairman Shin Dong-guk.”

The alliance’s comments follow Shin personally investing 164.4 billion won in July to settle inheritance taxes for the mother-daughter faction at a premium price of 37,000 won per share, as the deciding factor.

“As a result, we believe Chairman Shin’s interests are most closely aligned with those of minority shareholders,” Lee said.

The alliance also expressed disappointment with the eldest brother’s response to their written inquiries, noting his failure to fulfill promises made at the March shareholders’ meeting.

Looking ahead to the upcoming extraordinary shareholders’ meeting, the alliance has urged minority shareholders to consolidate their voting rights in favor of the three-party coalition of Shin and the mother-daughter duo.

The alliance also expressed support for the brother faction’s proposal regarding dividend reduction, indicating a balanced approach to shareholder interests despite their shift in primary support.

Despite the Minority Shareholders Alliance siding with Shin and the mother-daughter duo, the company’s share price slumped.

As of 10:30 a.m. Friday, the company’s shares stood at 45,350 won, down 5.03 percent from the previous trading day.

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