In an emergency board meeting early this week, Hanwha and DL decided to inject 200 billion won (about $145 million) to rescue the country's third-largest ethylene producer, though tensions remain as both sides dispute the causes of YNCC's prolonged losses and continue to struggle to agree on a path to full recovery.
DL criticized Hanwha for demanding lower feedstock prices, arguing that such terms would undermine YNCC's competitiveness.
DL said it had proposed long-term supply contracts with a downward price cap intended to cover variable costs and help stabilize YNCC's business structure. It claimed Hanwha rejected those terms and instead pushed for feedstock prices that would disproportionately benefit itself, even at the expense of YNCC's fair profits.
DL further warned that providing financial support without first addressing the root causes of YNCC's crisis would amount to blind backing, posing a risk of moral hazard and breaching fiduciary responsibility.
On Tuesday, DL argued that the 2025 tax probe into YNCC was comparable to a 2007 audit, which had ended in its favor following a Supreme Court ruling. DL suggested that the circumstances were similar and implied that the current case should not be treated as a serious violation.
This came after Hanwha revealed that the National Tax Service had imposed a 106.0 billion won (about $80 million) penalty on YNCC earlier this year for allegedly supplying ethylene and C4R1 at below-market prices. According to Hanwha, 96 percent of the total - about 96.2 billion won (about $72.6 million) - stemmed from transactions with DL.
Hanwha issued a statement the following day to refute DL. The company stressed that the two audits involved different taxable items and produced entirely separate outcomes. It rejected the idea that the earlier ruling could be used to dismiss the findings of the current probe.
Hanwha also took issue with DL's stance on product pricing. It claimed that DL had been pushing for an imbalanced structure - one where Hanwha pays a premium for ethylene, which it uses more, while DL receives discounts on products like C4R1, which it takes in larger volumes. Hanwha said its position has consistently been to set contract prices at fair market value.
The two companies, which each hold a 50-percent stake in YNCC, remain at odds over how to move forward. Hanwha has approved an additional loan of 150 billion won (about $113 million) to YNCC. DL, meanwhile, has maintained that any financial support must be preceded by a clearer assessment of the company's financial condition and internal restructuring efforts.
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