Hong Won-sik, former chairman, sued for 44.3 billion won in severance pay, but lost the case and must return 1.1 billion won

[Financial News] Hong Won-sik, former chairman of Namyang Dairy Products, filed a lawsuit against the company seeking 44.3 billion won in severance pay, but the claim was rejected. Instead, he partially lost a countersuit filed by Namyang Dairy Products and will have to return about 1.1 billion won to the company.
The 41st Civil Division of the Seoul Central District Court, presided over by Judge Lee Gyu-hoon, ruled against the plaintiff on the severance pay claim that Hong filed against Namyang Dairy Products on the 27th.
By contrast, the court partially accepted Namyang Dairy Products' claim for the return of unjust enrichment against Hong. The panel ordered Hong to pay 1.17242 billion won, plus late-payment interest, to the company.
After stepping down from the board of Namyang Dairy Products in March 2024, Hong filed the lawsuit in May of the same year, demanding 44.35775 billion won in severance pay. His side reportedly calculated the amount based on the company's rules on executive severance payments.
Namyang Dairy Products argued that Hong's method of calculating severance was unfair. In particular, it said the 5 billion won cap on board compensation approved at shareholders' meetings in 2023 and 2024 had been canceled by the court, so compensation for that period should not be reflected in the severance calculation.
Separately from this case, Hong is also facing a criminal trial after being indicted on charges including embezzling company funds for personal use and receiving kickbacks from business partners. In the first trial, he was found guilty of embezzlement and breach of trust and sentenced to three years in prison, along with a 4.3 billion won forfeiture order. The appeals trial is now under way.
 
[email protected] Choi Eun-sol Reporter