Hanmi Pharmaceutical CEO Alleges Major Shareholder Pressured Executive Authority

Park Jae-hyun, CEO of Hanmi Pharmaceutical (128940), has appealed to employees alleging that major shareholder Shin Dong-kook, chairman of Hanyang Precision Chemical, improperly blocked his exercise of executive authority. Critics say this directly contradicts the revised Commercial Act enacted last year to prevent majority shareholder overreach.

According to investment banking industry sources on Feb. 23, Park issued a statement to employees on Feb. 20 saying, "I have directly and indirectly requested that a specific major shareholder engage in responsible advice and discussion based on the essence of the pharmaceutical industry." He added, "However, those efforts have come back as criticism against me, and I feel pressure on the exercise of my fully granted authority as CEO." The "specific major shareholder" is understood to refer to Chairman Shin.

Park continued, "I am well aware of the significance and influence that a major shareholder has in a company. However, I believe there are values that must be protected above that." He added, "Within my authority, I will fulfill my responsibility to help Hanmi maintain its identity and move in the right direction."

Park's exercise of CEO authority has reportedly been repeatedly blocked by Shin. Shin allegedly instructed Park last year to switch to lower-cost active pharmaceutical ingredients. Park is said to have opposed this directive, stating he could not use unverified low-cost ingredients. When Park refused, Shin reportedly forced the ingredient change through his associates.

Such management interference has allegedly occurred multiple times. Shin reportedly vetoed decisions Park made objectively through committees. When Park made decisions through various committees, Shin's associates would reject them. A Hanmi Pharmaceutical official said, "Chairman Shin's associates consistently mentioned that the chairman said it was fine for them not to follow CEO Park's instructions."

Critics point out that such management intervention by Shin, who serves as a non-executive outside director of Hanmi Pharmaceutical, contradicts the intent of the revised Commercial Act. Last year's revision limited voting rights of the largest shareholder and related parties to 3% when appointing audit committee members and introduced measures including cumulative voting to check unilateral management by major shareholders. The aim was to prevent arbitrary control by specific major shareholders and separate ownership from management.

Shin holds a 23.4% stake in holding company Hanmi Science (008930) and serves as a non-executive outside director of both Hanmi Science and Hanmi Pharmaceutical. During the 2024 management dispute between mother-daughter and son factions, Shin, who held approximately 10% of shares, emerged as the key figure in resolving the conflict by acquiring shares from the mother-daughter side through a shareholder agreement. At that time, Shin, former Chairwoman Song Young-sook, and Vice Chairwoman Lim Ju-hyun signed a shareholder agreement to establish advanced governance by delegating management to professional executives.

An investment banking industry official said, "Directly participating in management as a shareholder while infringing on the authority of professional executives has illegal elements. He should participate in management by taking a position as an inside director and bearing responsibility."

Shin's side responded, "The claim of management interference is CEO Park's distorted assertion."