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Namyang Dairy Products places provisional seizure on real estate owned by former Managing Directors Hong Jin-seok and Hong Beom-seok, sons of former Chairman Hong Won-sik

[비즈한국] It has been confirmed that Namyang Dairy Products003920 has placed a provisional seizure on real estate owned by former Namyang Dairy Products Managing Directors Hong Jin-seok and Hong Beom-seok. Former Managing Directors Hong Jin-seok and Hong Beom-seok are the children of former Namyang Dairy Products Chairman Hong Won-sik.

Former Chairman Hong Won-sik sold Namyang Dairy Products to Hahn & Company (Hahn & Co.) last year. During the sale process, a conflict arose between former Chairman Hong and Hahn & Co. Although former Chairman Hong signed a sale agreement with Hahn & Co. in 2021, he later reversed his position. Eventually, former Chairman Hong and Hahn & Co. entered into litigation, and the court ruled in favor of Hahn & Co.

In August of last year, after being acquired by Hahn & Co., Namyang Dairy Products filed a complaint with the prosecution against former Chairman Hong Won-sik’s family on charges of embezzlement and breach of trust. Consequently, in January of this year, the prosecution indicted former Chairman Hong Won-sik (75), former advisor Lee Woon-kyung (73, former Chairman Hong’s wife), former Managing Director Hong Jin-seok (49), and former Managing Director Hong Beom-seok (46). Among them, only the charge of breach of trust was applied to former Managing Directors Hong Jin-seok and Hong Beom-seok.

According to the legal community, Namyang Dairy Products filed a damages suit against former Chairman Hong Won-sik’s family in January of this year, separate from the prosecution’s indictment. This is because the Namyang Dairy Products corporation suffered damages due to the illegal activities of former Chairman Hong’s family. The amount in controversy is approximately 21.5 billion KRW. The amount in controversy refers to the economic interest that the plaintiff seeks to achieve through the lawsuit, evaluated in monetary units.

Bizhankook’s investigation revealed that in March of this year, Namyang Dairy Products applied for a provisional seizure on a Cheongdam-dong residence owned by former Managing Director Hong Jin-seok and land in Seongbuk-dong owned by former Managing Director Hong Beom-seok, and the court accepted the application. A Namyang Dairy Products official stated regarding the real estate provisional seizure, "It is a matter related to the charges of breach of trust."

A provisional seizure is a system that allows a creditor to seize a debtor's assets in advance to prevent them from being disposed of. If Namyang Dairy Products wins the lawsuit in the final ruling and former Managing Directors Hong Jin-seok and Hong Beom-seok fail to fulfill the damages, the company can proceed with the compulsory execution of the provisionally seized real estate.

The Cheongdam-dong residence was purchased by former Managing Director Hong Jin-seok in 2021 for 4.37 billion KRW. As for the Seongbuk-dong land, former Managing Directors Hong Jin-seok and Hong Beom-seok each hold a 50% stake. However, Namyang Dairy Products placed a provisional seizure only on the stake held by former Managing Director Hong Beom-seok. It appears that since the company already seized former Managing Director Hong Jin-seok’s Cheongdam-dong residence, they did not feel the need to seize his portion of the Seongbuk-dong land as well. According to the real estate register, the amounts Namyang Dairy Products claimed against former Managing Director Hong Jin-seok and former Managing Director Hong Beom-seok are approximately 1.40809 billion KRW and 686.15 million KRW, respectively.

The legal community generally expects Namyang Dairy Products to win the case, as former Chairman Hong Won-sik also admitted to some of the charges during the trial. However, there are opinions that one should remain cautious regarding the breach of trust charges against former Managing Directors Hong Jin-seok and Hong Beom-seok.

It is reported that Namyang Dairy Products maintains a hardline stance toward former Chairman Hong Won-sik. When filing the complaint against the former chairman's family last year, Namyang Dairy Products disclosed, "We intend to take all necessary measures according to legal procedures regarding all matters proceeding after the submission of the complaint," and added, "We will actively cooperate with the investigations by relevant agencies."