Former Namyang Dairy owner's wife faces allegations of using company funds for personal donations

Allegations that Lee Un-kyung, wife of former Namyang Dairy Products Chairman Hong Won-sik, used company funds to make personal donations to arts organizations drew fire at a National Assembly national audit hearing. The case is drawing attention as one of a series of embezzlement and breach-of-trust allegations from the former owner family's era that have come to light since private equity firm Hahn & Company took over management of Namyang Dairy.

According to investment banking industry sources, Rebuilding Korea Party lawmaker Kim Jae-won raised the allegations at the National Assembly's Culture, Sports and Tourism Committee national audit on Monday, saying Lee had used company funds to sponsor arts organizations under her personal name.

After Hahn & Company acquired management control of Namyang Dairy in 2024, the company began restructuring its governance. It introduced an executive officer system separating the roles of the board and management, and has been working to strengthen internal controls and compliance. The latest complaint is another case in which internal reviews conducted under the Hahn & Company regime have led to additional legal action.

During his questioning of the National Museum of Modern and Contemporary Art, Kim said, "Lee Un-kyung, who served as vice president of the Museum of Modern and Contemporary Art Association — a nonprofit that supports the National Museum of Modern and Contemporary Art — is under investigation on breach-of-trust charges for allegedly sponsoring multiple arts organizations under her personal name using approximately 860 million won ($646,000) of Namyang Dairy's funds. The intent to support the arts is commendable, but if the source of the funds is opaque, it damages the credibility of the art world. Please ensure transparency in donations from sponsoring organizations and establish a self-regulatory framework."

Namyang Dairy confirmed the matter and disclosed that it filed a complaint against Lee on Sept. 8 on charges of breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes. The amount involved in the charges is approximately 857.98 million won, and the Seoul Gangnam Police Station is currently investigating the case.

Namyang Dairy said Lee used company funds to donate to and sponsor social, cultural and arts organizations in which she participated in a personal capacity between 2002 and 2023, and also used corporate credit cards and travel expenses for related external activities. Lee had held senior positions in a number of organizations, including the Museum of Modern and Contemporary Art Association, Soroptimist International of Korea, Sejong Soloists and Arumjigi. Her side has argued that prosecutors previously declined to indict her on similar charges, having determined the activities constituted corporate social contribution.

The matter came to light as the company reviewed past financial records following the change in management. Namyang Dairy has been directly verifying the facts and holding the former owner family accountable by filing complaints with investigative authorities over embezzlement and breach-of-trust allegations against them.

Since filing a complaint against former Chairman Hong on embezzlement and breach-of-trust charges in January 2025, the company has continued criminal proceedings against Lee and other family members as well as former executives. The total amount implicated through company complaints and prosecutorial indictments has reached 26.6 billion won.

A first-instance verdict on some of the charges against Lee was handed down in January. The court sentenced her to two years and six months in prison, suspended for four years. Her eldest son, former Managing Director Hong Jin-seok, and second son, former Assistant Managing Director Hong Beom-seok, who were indicted alongside her, received suspended sentences of three years with a five-year suspension and two years with a four-year suspension, respectively. The court found that they had caused financial damage to the company by using approximately 3.7 billion won ($2.78 million) of Namyang Dairy's funds for personal expenses, including luxury goods purchases, high-end vehicles and living costs.