Reporter's Notebook Namyang Dairy boss's diminishing reputation
Namyang Dairy Products founder Hong Won-sik stands behind the podium to announce the fact that he would be stepping down from the chairperson position at the company's headquarters in Seoul, May 4. Korea Times photo by Koh Young-kwon
By Kim Jae-heun
Namyang Dairy Products is experiencing an unprecedented degree of backlash against its founder, Hong Won-sik, who has reversed promises he made to the public in the last month.
One of the pledges he made was not to pass the management of the company to his children.
Independent of any direct action from the former chairperson, Hong's eldest son, Hong Jin-seok, returned to his senior executive position only a month after he was dismissed for misusing company money. Hong Won-sik's second son, Hong Bum-seok, was also promoted as an unregistered executive recently.
This situation leaves the possibility that one of the two sons will take a key post on the board of directors and eventually lead the company.
The company explained that due to the prolonged COVID-19 pandemic, it was suffering vacancies in key management positions, and that Hong's two sons were needed to help the company achieve its business performance goals.
The former chairperson himself is still reportedly spending time at the company's headquarters in Seoul, despite having offered to resign.
In addition, Hong was also criticized for not showing up at a shareholders meeting on July 30, where he was supposed to close a stock purchase agreement with Hahn & Company.
As a result, public concern has continued to build, even though Hong made a public appearance two weeks ago seeking to refute allegations that he had changed his mind.
If Hong continues to create an unclear picture, people will start to distrust his words and actions. Namyang Dairy customers have already been betrayed once, when the company released a false report claiming that the company's popular yogurt drink, Bulgaris, could help prevent COVID-19 infections.
Next time, there will be even less forgiveness for the dairy firm.
Moon Eul-tae, Namyang Dairy's labor union president, is already protesting against Hong in front of the company's building. Moon said that Hong has not responded to any of the union's questions and refuses to communicate with them.
In order to regain customer trust and increase corporate value, Hong must fulfill the promises he made.
Meanwhile, Namyang Dairy's business performance is showing signs of deterioration. In the first half of this year, the dairy firm recorded an operating loss of 34.97 billion won.
The deficit is greater than the reported year-on-year loss of 32.52 billion won. Namyang Dairy's sales also decreased by 1.1 percent to 479.5 billion won between January and June of this year.