Shin Dong-kuk, chairman of Hanyang Precision, has won the first-round ruling in a 60 billion won penalty claim brought by the founding family of Hanmi Pharmaceutical (128940) over a board vote that rejected a senior care project. The court found that an earlier board resolution amounted to a conditional approval, meaning the subsequent discussions could not be seen as going beyond the original agreement among shareholders.
The 30th civil division of the Seoul Central District Court, presided over by Chief Judge Kim Seok-beom, dismissed all claims on the 1st in the penalty suit filed against Shin by Song Young-sook, chairwoman of Hanmi Pharmaceutical, and Lim Ju-hyun, vice chairwoman of Hanmi Science.
In July 2024, Song and Lim joined with Shin and Ladefense Partners to form what became known as the "four-party alliance." The group signed a shareholder agreement covering the joint exercise of voting rights and major management decisions. The agreement called for a penalty of 60 billion won in the event of a breach.
Song and Lim then pursued a senior care business. The dispute between the two sides surfaced when Shin took a position against the project. On June 5 last year, the Hanmi Science board gave conditional approval to invest 16 billion won in a senior residence project in Banpo-dong, Seocho-gu, Seoul, on the condition that Seoul St. Mary's Hospital actively cooperate. On the 10th of the same month, however, the board revisited the matter and withdrew the earlier investment decision, citing difficulties in obtaining a specific commitment from Seoul St. Mary's Hospital, concerns that recovering the investment could take a long time and the challenge of securing additional investors.
Song and Lim then filed suit, arguing that Shin had breached the shareholder agreement by putting a motion to reconsider the investment on the agenda without their consent and by voting it down, contrary to what they said had been agreed.
The court sided with Shin. It found that the resolution adopted before the final board meeting amounted to a conditional approval. The later resolution was also aimed at settling whether to proceed with the investment, the court said, and could not be viewed as a separate board meeting convened to take up a new item different from the earlier one.
"There is no evidence that the directors were notified of whether the conditions set in the preceding resolution had been met before the resolution at issue," the court said. "It cannot be seen as departing from the agreement between the two sides to place the question of whether to invest in the business on the agenda of the target company's board."
The court also found no evidence that the parties had gone beyond agreeing to put the investment question on the board's agenda and had definitively agreed to invest in the business.
Shin's side said after the ruling that it had been confident in the facts and the law and saw no reason to escalate an unnecessary fight. "We will work to ensure that board-centered accountable management and a professional management system take firmer root," it said.
