Hanmi Pharmaceutical will launch a special audit regarding accounts receivable at its Chinese subsidiary, Beijing Hanmi Pharmaceutical, under the leadership of an independent audit committee. This move follows the acceptance of a proposal recently submitted by Life Asset Management through a letter to shareholders.
According to pharmaceutical industry sources on the 12th, Hanmi Pharmaceutical held a preliminary meeting at its headquarters on the 8th to kick off the special investigation. The meeting was attended by the audit committee, the Chief Risk Officer (CRO) organization, and two external specialist institutional investors in the accounting and legal fields, marking the start of formal proceedings.
The Hanmi Pharmaceutical Audit Committee initiated the process for appointing external experts on the 23rd of last month. After pre-verifying potential conflicts of interest on the 2nd of this month, it appointed two external specialist institutional investors in accounting and law as investigation institutional investors. Hanmi Pharmaceutical plans to transfer its existing internal audit materials to these external specialists and conduct on-site visits in Beijing and interviews with relevant personnel.
The investigation will be conducted independently from current and former management and business partners, under the direction of the audit committee. Hanmi Pharmaceutical aims to produce investigation results by the end of this month. Once the results are available, the company plans to share them transparently with shareholders and the market, and implement follow-up measures such as debt recovery, a re-examination of contracts and governance, and improvements to internal controls for any confirmed issues.
A Hanmi Pharmaceutical official stated, "We will humbly accept the issues raised by our shareholders to ensure that an independent and objective investigation is conducted." The official added, "By transparently sharing the investigation results and faithfully implementing necessary improvement measures, we will protect shareholder value and enhance trust in internal controls and corporate governance."
Beijing Hanmi is a local Chinese entity in which Hanmi Pharmaceutical holds a 73.68% stake. Lunmeikang, which handles local pharmaceutical distribution, is an affiliate of Core Group. Beijing Hanmi's uncollected accounts receivable from Lunmeikang surged from 35.1 billion won at the end of 2023 to 125.4 billion won by the end of 2025. Beijing Hanmi did not establish a separate allowance for doubtful accounts for these debts.
The Chairman of the Board of Directors of Beijing Hanmi (Lee Sa-hoe (Chairman)) is Im Jong-yoon, President of Core Group and the eldest son of the founder of the Hanmi Group. Consequently, Life Asset Management argued that since Lim (Chairman) concurrently serves as the Chairman of the Board of Directors at Beijing Hanmi, it is difficult for mutual checks to be maintained when the two companies conduct transactions with each other.
Kang Dae-gwon, Co-CEO of Life Asset Management, stated, "The essence of the issue is not non-performing loans (NPLs), but the absence of oversight, which ultimately amounts to a corporate governance problem." He added, "Simply having an independent audit committee conduct the investigation and report its results to shareholders could change market perceptions." He further noted, "The proposal for a special audit of Beijing Hanmi is intended for the long-term benefit of the company and all shareholders."
in THEBIO
