Hanmi Science's top shareholder under fire for 'imperial' management style

Market concerns over Hanmi Pharm Group are deepening as a string of corporate governance issues tied to its largest shareholder, Shin Dong-kook, chairman of Hanyang Precision, continue to surface — from his unilateral reversal of a new business deal to speculation over financing for additional stake acquisitions, all of which threaten to erode the group's corporate value.

Earlier this year, Hanmi Pharm Group formally installed Hwang Sang-yeon as its new chief executive after the reappointment of former CEO Park Jae-hyun fell through, presenting the transition as a shift toward independent, professional management. Yet industry insiders say Shin has never stopped intervening in day-to-day operations, using internal and external executives as conduits for his directives.

Amid this backdrop, past remarks by Shin have now come to light in which he compared himself to a president to justify his management interference. Critics say the remarks put him at odds with recently revised corporate law amendments emphasizing board independence and shareholder value.

Legal sources point to a prior case involving Hanyang S&C, a company wholly owned by Shin, which received 5.7 billion won ($3.7 million) in employment subsidies from Haman-gun in South Gyeongsang Province but failed to meet its mandatory hiring obligations. The Supreme Court issued a final ruling ordering the clawback of more than 2 billion won, delivering a sharp rebuke to the controlling shareholder for failing to honor a public contract tied to job creation.

A similar pattern played out within the Hanmi group and escalated into litigation. Shin reversed a shareholder agreement he had reached with Hanmi Group chairwoman Song Young-sook and her daughter within just three days, killing a premium senior-living project — known internally as the Banpo Senior Care development — that had been positioned as a future growth initiative linked to Catholic St. Mary's Hospital's care services. The reversal triggered a breach-of-contract lawsuit now seeking 60 billion won in penalties, with the trial ongoing.

More recently, it emerged that Shin had approached domestic securities firms to explore raising roughly 300 billion won to acquire shares held by Lim Jong-hoon, the second son of the late founder Lim Sung-ki. Although Lim Jong-hoon declined and no financing was ultimately arranged, the mere attempt to mobilize funds on that scale rattled the market again and prompted wide speculation about a potential shift in the group's ownership structure. On Thursday, Lim Jong-hoon sold part of his Hanmi Science stake to a third party, saying he would "continue to carry on the management philosophy and vision of Hanmi Group founder and late chairman Lim Sung-ki together with my mother, Chairwoman Song Young-sook, and my sister, Vice Chairwoman Lim Ju-hyun."

The governance instability is also said to have caused serious conflict even under the previous professional-management arrangement. When former CEO Park pushed back against having company staff carry out work that bypassed him, Shin reportedly called Park directly to pressure him. Shin allegedly compared himself to a president, saying, "Does the president only work with the prime minister? Sometimes he calls in ministers, sometimes the head of the intelligence service" — remarks that critics say were aimed at stripping the CEO of his authority.

Shin holds only a non-standing outside director seat on the board, yet he is said to have treated it as routine to issue work instructions directly to employees while bypassing the CEO entirely. He also allegedly pressured Park on a personal level, at one point demanding a list of Park's private real estate holdings.

Park, who has since stepped down to an advisory role, said he had heard Shin "has not stopped making insulting remarks about me in official settings such as board meetings." Park added that "the extreme stress from the controlling shareholder's management interference at the time took a severe toll on my health — I suffered lasting aftereffects serious enough to require psychiatric treatment," and said he was "considering filing a legal complaint for defamation and other charges if the insulting remarks in official settings continue."

Industry observers say that as long as the controlling shareholder's habitual pattern of broken promises and unchecked management interference goes unaddressed, restoring shareholder confidence and normalizing the company's valuation will remain an uphill battle for now. "It is a snapshot of a governance mindset that treats a listed company as the controlling shareholder's personal property," one capital markets official said. "This kind of governance instability is diluting even the company's genuine drug development prospects."

A Hanmi Group official drew a line on the matter, saying the company "is already reorganizing under a new professional management structure, with a full slate of projects to push forward this year, including the launch of an obesity drug," and that it "cannot comment on matters related to a specific shareholder." Attempts to reach Shin's side for comment were unsuccessful.