Donation Allegations Against Namyang Dairy Products' Former Owner's Family Raised at Parliamentary Audit
Former Chairman Hong Wonsik's spouse suspected of donating with company funds
Allegations publicly raised at Culture Committee audit
Hahn & Company's efforts to address past risks put to the test
Controversy over alleged breach of trust involving donations by former owners of Namyang Dairy Products was raised during a parliamentary audit. The case followed additional criminal complaints filed after private equity firm Hahn & Company took control of the company and reviewed past uses of its funds.
At the parliamentary audit by the National Assembly’s Culture, Sports and Tourism Committee on October 19, Kim Jaewon, a lawmaker from the Rebuilding Korea Party, raised allegations that Lee Ungyeong, wife of former Namyang Dairy Products Chairman Hong Wonsik and a former advisor to the company, had used company funds to support arts organizations. “The MMCA Society is a nonprofit organization that supports the National Museum of Modern and Contemporary Art. Ms. Lee, who served as the organization’s vice chair, is under investigation on suspicion of breach of trust for using about 860 million won in Namyang Dairy Products’ corporate funds to support several arts organizations in her own name,” Kim said.
He continued, “The purpose of the donations may be laudable, but if the source of the funds is unclear, it undermines trust in the art world,” and asked the organizations to “ensure transparency in their donations and develop measures for self-regulation.” Yoon Taewook, acting director of the National Museum of Modern and Contemporary Art, replied, “Understood.” The MMCA Society describes itself as “a nonprofit organization dedicated to supporting the development of the National Museum of Modern and Contemporary Art and promoting the public’s proper awareness and understanding of contemporary art.”
Earlier, Namyang Dairy Products disclosed on September 8 that it had filed a criminal complaint against Lee, a former advisor, on suspicion of breach of trust under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes. The alleged amount is about 857.98 million won. The Seoul Gangnam Police Station is reportedly investigating the case. Since the private equity firm’s acquisition, the company has reformed its corporate governance and internal controls, moving to address problems stemming from its former owner-led management.
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Namyang Dairy Products alleged that from 2002 to 2023, Lee donated and provided sponsorship to social and cultural arts organizations in which she was active in her personal capacity, using company funds, and used corporate credit cards and travel expenses for related external activities. Lee previously held senior positions at organizations including the MMCA Society, Soroptimist International of Korea, Sejong Soloists, and Arumjigi. Lee’s side reportedly argued that prosecutors had previously declined to indict her over similar allegations, having determined that the activities constituted social contribution work.
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