Lim Jong-yoon, left, and Jong-hoon, sons of Hanmi Pharmaceutical Group Chairwoman Song Young-sook, enter the venue of the annual general meeting of Hanmi Science shareholders at a hotel in Hwaseong, Gyeonggi Province, Thursday. Newsis

Hanmi Pharmaceutical Group Chairwoman Song Young-sook's plan to merge the drug developer with OCI Group, a local chemical firm, ended up in failure, Thursday, following the appointment of all five director nominees recommended by her opponents, led by her two sons – Lim Jong-yoon and Jong-hoon, according to industry officials.

During the annual general meeting of the shareholders of Hanmi Science, the pharmaceutical firm's holding company, the brothers' proposals of appointing themselves and also three other director nominees were passed as more shareholders supported them.

In contrast, the shareholders rejected the management's proposal of giving Hanmi Science's board seats to six supporters of the merger, including Hanmi Vice Chairwoman Lim Ju-hyun, the chairwoman's daughter, and OCI Chairman Lee Woo-hyun.

As a result, the opponents of the merger were allowed to hold the majority of the Hanmi Science board. Three months of feud in the Hanmi owner family also ended with the victory of the brothers.

After the meeting, OCI decided to quit the merger process to respect Hanmi Science shareholders. The OCI chairman attended the meeting alongside the Lim brothers, amid the absence of Song and her daughter.

In addition, the meeting's results sharply raised Hanmi Science's stock price, which closed at 44,350 won ($33) that day, up 9.1 percent from the previous session.

The Hanmi owner family feud broke out after the company and OCI announced in January that they would merge via OCI Holdings's acquisition of a 27 percent stake in Hanmi Science and the Hanmi owner family's acquisition of a 10.4 percent stake in the holding company of OCI Group.

As the plan caused legal battles inside the family, the Hanmi chairwoman, the wife of late Hanmi founder Lim Sung-ki, who died in 2020, even dismissed her two sons from their posts as Hanmi Pharmaceutical presidents. She also promoted her daughter to vice chairwoman from president ahead of the shareholders' meeting.

Song claimed that her sons have refused to work together to raise money to pay inheritance taxes, although the brothers denied their mother's claim that they have tried to sell their shares at higher prices to pay inheritance taxes, rather than protecting the pharmaceutical firm.

Amid the intensifying dispute, proxy advisers here and overseas were divided about whether Hanmi Science's shareholders should support director nominees recommended by the chairwoman or those recommended by her sons.

While the brothers won support from Hanyang Precision CEO Shin Dong-kuk, the late Hanmi founder's friend who holds a 12.25 percent stake in Hanmi Science, their mother and sister were backed by the National Pension Service, which owns a 7.66 percent stake in Hanmi Science.

A group of minority shareholders owning more than a 2 percent stake supported the brothers, regarding the merger as the chairwoman's attempt to hand over her company to OCI.