Hong Won-sik, the former chairman of Namyang Dairy, has lost his lawsuit seeking 44.3 billion won in severance pay from the company. Instead, the court ruled that Hong must return 1.1 billion won in unjust enrichment to Namyang Dairy.
The Seoul Central District Court's Civil Division 41, presided over by Judge Lee Gyu-hoon, announced its decision on August 27 regarding Hong's claim for executive severance pay.
Conversely, the court ordered Hong to pay Namyang Dairy 11,724,285,570 won plus delayed interest in a counterclaim filed by the company.
The court stated, "The costs of both lawsuits will be borne 90% by Hong and 10% by Namyang Dairy."
Hong, who resigned in March 2024, demanded severance pay of 44.3 billion won from Namyang Dairy. After failing to reach an agreement, he filed the lawsuit in May of the same year.
The key issue in the trial was the salary during Hong's tenure. At the 2023 shareholders' meeting, Hong approved a proposal to set the director's salary limit at 5 billion won.
However, according to the Commercial Act, "Shareholders with a special interest in the resolution cannot exercise their voting rights." Namyang Dairy subsequently filed a lawsuit to annul the resolution, and the Supreme Court concluded that Hong's exercise of voting rights was illegal.
Based on this, Namyang Dairy argued that the salary during the period without a valid resolution could not be included in the severance pay calculation.
The court also noted, "The ruling to annul the shareholders' meeting resolutions from 2023 and 2024 has been finalized, and the payments made to the plaintiff, who is a director, from January 2023 to April 2024 were made without legal grounds and are deemed unjust enrichment."
In a statement, Namyang Dairy said, "Hong's claim for severance pay was not recognized, and it has been confirmed that he must return approximately 1.1 billion won to Namyang Dairy. We respect the judgment of the first-instance court."
Meanwhile, Hong has been indicted on eight charges, including causing damage to the company by unnecessarily involving businesses operated by relatives in transactions. In January of this year, he was sentenced to three years in prison and ordered to pay 4.376 billion won in restitution. An appeal is currently underway.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.