Hanmi Pharmaceutical Group's year-long family feud over management control is poised to end, as a pivotal share transfer shifts power within the founding family. From left: Shin Dong-kuk, chairman of Hanyang Precision; Song Young-sook, the widow of Hanmi's founder; Lim Joo-hyun, vice chairperson of Hanmi Group; Lim Jong-yoon, a director at Hanmi Science; and Lim Jong-hoon, CEO of Hanmi Science. /Graphic by Kim Sung-kyu

A year-long management dispute within the Hanmi Pharmaceutical Group family is nearing resolution. The conflict began in January when the group’s consolidation plan with OCI Group triggered a rift among the family members.

The feud between the widow of Hanmi’s founder, Song Young-sook, and her daughters on one side, and her eldest son, Lim Jong-yoon, a director at Hanmi Science, is coming to an end. Lim has agreed to transfer part of his shares, which is seen as a move not only to stabilize management but also to secure funds for inheritance taxes.

Hanmi Science, the holding company of Hanmi Pharmaceutical, announced on Dec. 26 that Lim will sell a 5% stake—equivalent to 3.42 million shares—to Shin Dong-kuk, chairman of Hanyang Precision, and Killington LLC, a special-purpose entity of private equity firm La Défense Partners.

Shin and Killington have been aligned with Song and her daughters as part of the Alliance of Four, which has been at odds with Lim and his younger brother, Lim Jong-hoon. Following the sale, Shin will acquire 3% of the shares, while Killington will take 2%. The transaction, set to be completed off-market on Jan. 27, will increase the alliance’s stake from 49.42% to 54.42%, giving it a majority. Meanwhile, the brothers’ combined stake will decrease to 21.8%.

The alliance released a statement saying the share transfer was essential for “enhancing Hanmi Group’s corporate value, ensuring stable management, and fostering cooperation.” The statement also noted that all civil and criminal lawsuits between the parties would be withdrawn. While Lim Jong-yoon did not issue a separate statement, he is believed to have agreed to the arrangement. His younger brother, Hanmi Science CEO Lim Jong-hoon, commented briefly, saying he was “discussing the matter” with his elder brother.

Analysts believe Lim Jong-yoon’s decision to sell his shares was influenced by mounting pressure to pay inheritance taxes. After the group’s founder, Lim Sung-ki, passed away in 2020, the family was slapped with 540 billion won in inheritance taxes, including 200 billion won for Song and about 100 billion won each for the three siblings. Lim Jong-yoon has also been unable to extend deadlines on stock-collateral loans with multiple securities firms, which began maturing last month. The sale is expected to net him 126.5 billion won in cash.

With the stake transfer, Lim Jong-hoon’s position as CEO is expected to weaken. Observers predict that the Alliance of Four may move to replace him with a professional manager and restructure the organization at next year’s regular shareholder meeting. If Lim refuses to step down, the alliance could push for his removal during the March meeting.