Three former executives filed the complaint with Yongsan Police Station, alleging misuse of Hanyang Precision funds

Complaint details repeated short-term loan withdrawals, a 113 billion won dividend and alleged toll-fee scheme

Shin's camp calls the transactions lawful and vows strong legal action

Hanmi Pharm headquarters in Songpa-gu, Seoul [Hanmi Group]
Hanmi Pharm headquarters in Songpa-gu, Seoul [Hanmi Group]

Shin Dong-kook, chairman of Hanyang Precision and the largest individual shareholder of Hanmi Science, has been reported to police by former Hanmi Group executives on allegations that he misappropriated corporate funds from Hanyang Precision for personal use.

Three former Hanmi Group executives, including a former executive vice president, filed a complaint against Shin and his eldest son on Friday with the Seoul Yongsan Police Station, alleging violations of the Act on the Aggravated Punishment of Specific Economic Crimes, including embezzlement and breach of fiduciary duty, according to industry sources.

The complainants allege that Shin exploited Hanyang Precision — a company he owns 100 percent — as a personal slush fund, diverting corporate money on a large scale. The complaint is said to detail the alleged misappropriation and breach of duty across several categories, including the use of short-term loans, excessive dividend payments, funneling business to a family-owned company and embezzlement under the guise of capital investment.

On the short-term loan allegations, the complainants said Shin repeatedly withdrew approximately 467.3 billion won ($347 million) from Hanyang Precision under the name of short-term loans over a 10-year period from 2014 to 2023, repaying the amounts in full at each fiscal year-end to maintain the appearance of proper accounting. The complaint also states that in 2024 and 2025, Shin withdrew an additional 44.4 billion won in short-term loans and used the funds to acquire Hanmi Science shares in his own name.

The complainants also raised allegations of breach of fiduciary duty through excessive dividend payments, saying Shin liquidated Hanyang Precision's financial assets and took out real estate-backed loans in 2020 to pay himself an interim dividend of 113 billion won — tens of times the company's annual operating profit — causing financial harm to the company. The complaint further alleges that Shin inserted a family-owned company, H&D, which had no human or physical infrastructure, into Hanyang Precision's raw material procurement chain, channeling approximately 49.6 billion won in transactions over five years from 2021 and extracting toll fees and business opportunities. Allegations of embezzlement under the pretext of capital investment were also included.

Shin's camp rebuffed the complaint, saying it was groundless and that the legality of the transactions had already been confirmed through audits and tax investigations.

In a statement, Shin's representatives said all monetary loans to the company were made under formal loan agreements, with principal and statutory interest repaid on time, and that the 2020 interim dividend was lawfully executed with taxes duly paid within the bounds permitted by law.

They added that H&D operates a legitimate business model that delivers real benefits to all affiliates through bulk steel-plate purchases that lower unit costs, and that the camp would take strong legal action — including filing complaints for false accusation and defamation — as soon as it reviewed the complaint.


silverpaper@heraldcorp.com