Former Namyang Dairy Chairman Hong Won-sik Loses 1st Trial in 44.3 Billion Won Severance Pay Lawsuit

Former Namyang Dairy Chairman Hong Won-sik has lost the first trial in a lawsuit filed against the company seeking 44.3 billion won in severance pay.

A countersuit filed by Namyang Dairy demanding the return of unjust enrichment was partially accepted, ordering Hong to instead pay approximately 1.1 billion won to the company.

The 41st Civil Division of the Seoul Central District Court (Presiding Judge Lee Kyu-hoon) ruled against the plaintiff on the 27th in the executive severance pay lawsuit filed by former Chairman Hong against Namyang Dairy.

Conversely, the court partially sustained the unjust enrichment return lawsuit filed by Namyang Dairy, ordering that "former Chairman Hong pay approximately 1.17 billion won and delayed interest to Namyang Dairy."

Former Chairman Hong, who stepped down from his position as a board director in March 2024, previously filed a lawsuit in May of that year demanding 44,357,750,000 won in severance pay from Namyang Dairy.

Hong's side reportedly calculated the amount based on the company's executive severance pay regulations and other guidelines.

On the other hand, Namyang Dairy argued that since the agenda items for a 5-billion-won director compensation limit passed at the 2023 and 2024 shareholders' meetings were nullified by the court, those periods should be excluded from the severance pay calculation.

Separately, former Chairman Hong was indicted on embezzlement and breach of trust charges related to allegations of embezzling company funds for personal use and receiving rebates from partners, and was sentenced to three years in prison with an additional forfeiture of 4.3 billion won in the first trial, with an appeal currently underway.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.