Court blocks Namyang Dairy boss from pursuing side deal

The Seoul Central District Court on Wednesday granted an injunction to local private equity firm Hahn & Co. to stop Namyang Dairy Products from selling a majority stake to a third company.

The court ruled that Namyang should cut all ties to Dayou Winia Group. It had attempted to sell a majority stake in a deal reached with Dayou in November last year, effectively freezing out Hahn & Co., with which it had previously agreed to sell the stake.

Namyang had tried to fill its key positions with Dayou representatives, a move Hahn & Co. saw as threatening to breach its exclusive rights to engage in the deal.

“Such business exchange between the two companies is highly unusual in light of the standing deal with Hahn & Co. … It could lead to Dayou in possession of classified information, such as trade secrets, involving Namyang Dairy Products,” the court said in the order.

The court rejected Namyang’s argument that it had been misled by its legal representatives during initial negotiations with Hahn & Co. because they had also advised the private equity firm.

This was the third win for the private equity firm in a series of legal battles with Namyang. Hahn & Co. had been seeking to block Namyang from reneging on the sales deal since last year.

By Choi Si-young (siyoungchoi@heraldcorp.com)