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| ▲ The corporate logo of Namyang Dairy Products Co. at the company's headquarters in Seoul on Jan. 4, 2024. (Yonhap) |
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| ▲ In this file photo taken May 4, 2021, Hong Won-shik, chairman of Namyang Dairy Products Co., apologizes for causing a misunderstanding among consumers during a press briefing at the Seoul headquarters. (Yonhap) |
dairy firm-family ownership
After losing management dispute, Namyang Dairy's family ownership comes to end
SEOUL, Jan. 4 (Yonhap) -- Namyang Dairy Products Co., a major dairy firm in South Korea, is set to end its 60-year family ownership following a loss in a management dispute with a local private equity fund.
The Supreme Court on Thursday upheld a lower court's decision that orders Namyang Chairman Hong Won-sik to sell his controlling stake to Hahn & Co. He and his family own a combined 53 percent share in the dairy firm.
As a result, Hahn & Co. will take control of the company, which will become a non-family-owned firm for the first time since its establishment six decades ago.
Founded by Hong's late father Doo-young in 1964, Namyang had long held the position as the second-largest producer in the local dairy market, trailing behind Seoul Dairy Cooperative, with popular products like its GT Milk series and Bulgaris yogurts.
At the center of Namyang's journey was Chairman Hong, the eldest son of the late founder, who joined the company in 1977 and advanced to the top post in 2003.
Since 2010, however, the dairy firm has faced challenges, including a consumer boycott in 2013 and controversies involving market power abuse and several legal issues surrounding Chairman Hong and his family.
The recent dispute with Hahn & Co. began in 2021, when Namyang claimed its Bulgaris yogurt could reduce the chance of contracting the novel coronavirus, sparking a social controversy.
Chairman Hong initially offered to resign and agreed to sell a 53 percent stake to Hahn & Co., but the deal was later canceled by the owner family, resulting in a lawsuit.
Despite the Supreme Court ruling, the normalization process of Namyang will take some time due to pending issues between the two sides.
Hahn & Co. said it will focus on normalizing Namyang's operations.
"Together with the employees of Namyang, we will develop a management improvement plan to restore consumer trust and create a new Namyang," Hann & Co. said in a statement.
Namyang's yearly sales have dropped to below 1 trillion won (US$763.5 million) since 2020, with a net deficit for the past three years.
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