Namyang Dairy Products, one of South Korea's largest dairy companies, is embarking on a major overhaul under new ownership to shed its scandal-ridden past.
On Friday, the company’s newly appointed board of directors announced a series of reform measures aimed at rebuilding the company’s reputation and regaining consumer trust.
"We're establishing guidelines for law-abiding business practices to prevent illegal activities," said Lee Sang-wook, Namyang's chief compliance director. "We promise a zero-tolerance policy against those involved in misconduct."
The path to new management was fraught with challenges. In January 2021, Seoul-based private equity firm Hahn & Co. struck a deal to acquire a majority stake in Namyang. Months later, then-chairman Hong Won-sik unexpectedly tried to back out, citing unfavorable terms. After a three-year legal battle, the Supreme Court upheld the original deal in January, finally clearing the way for new ownership.
Since taking over, Hahn & Co. has been pushing hard to revamp the company's image and operations. Earlier in May, the company set up an Ethics Division and appointed Lee Sang-wook, a former prosecutor, as chief compliance director. Plans are underway to establish a compliance committee with external experts this month to enhance oversight.
Friday's initiatives expand on these efforts, introducing more comprehensive measures to streamline its governance structure. The company will implement a system for stringent internal monitoring, including regular audits and hearings to prevent accounting malpractice. It is also developing a detailed compliance and ethics program, complete with financial management and security internal control rule books.
These standards will be the basis for around-the-clock oversight to detect irregularities. Additionally, the management plans to establish an in-house hotline for reporting corruption, further strengthening its commitment to transparency and ethical business practices.
"We're committed to enhancing the ethical awareness of all our staff," Lee added. "Our goal is to pursue sustainable growth that benefits all stakeholders."
In addition to internal reforms, Namyang has been ramping up its community outreach efforts. The company was recently nominated for recognition by the Korea Fair Trade Commission for improved cooperation with local retailers. It has also been supplying specialized milk powder for children with disabilities, demonstrating a commitment to social responsibility amid its governance and ethical reforms.
