Namyang Dairy chairman breaks pledge to resign, paid W808m in H1

Namyang Dairy Products Chairman Hong Won-sik, who pledged to resign from the top post of the dairy firm due to a scandal in May, turns out to have reversed the decision to maintain his post, the company’s half-year report showed Thursday.

According to the report, Hong remains registered as the chairman of the company as a full-time employee, and he was paid a total of 808 million won ($682,685) in the first half of this year.

On May 4, Hong publicly announced he would resign after the company came under fire for a claim that its yogurt drink Bulgaris could help protect people from COVID-19.

He had also said he would not hand over the management rights of the company to his children.

But, he appears to be failing to keep his promise.

Hong’s eldest son, Namyang’s managing director Hong Jin-seok, who was dismissed from his position in April for allegedly misusing the company’s funds for personal expenses, was reinstated after a month, according to the report.

The chairman’s youngest son, Hong Bum-seok, who also works for the company, was promoted as an unregistered executive in the same month.

Regarding the CEO’s unchanged position, a Namyang Dairy official said he is not doing daily business operations, but comes to office to work on the company’s sellout deal.

As part of the pledge to reform the company, Hong had proposed put the company up for sale.

In May, Namyang Dairy Product said its board has agreed to sell 53.07 percent of the company stakes owned by Hong, his wife and his grandson, to the country’s second-largest private equity firm Hahn & Co. for 310.7 billion won, according to the disclosure submitted to the Financial Supervisory Service.

But then, Hong delayed the deal the day the transaction was set to be made to Sept. 14 without consent, raising questions about the intention of putting the company up for sale.

Expressing regret over the dairy firm’s “unilateral” decision, Hahn & Co. said it is considering taking legal action against Hong for breach of contract.

By Jo He-rim (herim@heraldcorp.com)