English translation of the original Korean report. Images and source documents may contain Korean text.

Conveyors Operated Without Required Inspections Despite Pledge to ‘Inspect All Workplaces’…45 Subcontractor Workers Illegally Dispatched

Dong Seon Kim Becomes Largest Shareholder of Hanwha M&S, Which Controls Ourhome…Commits Up to 210.8 Billion Won in Pursuit of ‘Responsible Management’

A total of 92 legal violations were uncovered at Ourhome, a Hanwha Group affiliate, even after two workers died in successive accidents. The Ministry of Employment and Labor demanded that Hanwha Group’s top management fundamentally overhaul its safety management system.

On the same day, Dong Seon Kim, President and Head of Future Strategy at Hanwha Machinery & Service Holdings (Hanwha M&S), the holding company that controls Ourhome, launched a second tender offer under the stated goal of ‘strengthening responsible management.’ He is consolidating his position as the holding company’s largest shareholder by committing up to 210.8 billion won of his personal funds.

According to the Ministry of Employment and Labor on the 12th, the ministry announced on the 9th the results of inspections covering all nine Ourhome factories and 17 on-site subcontractors. Inspectors identified a total of 92 legal violations, including 53 industrial safety violations and 39 labor standards violations. The ministry will pursue judicial action in 13 cases and impose administrative fines totaling 86.3 million won for 37 violations.

At Ourhome’s Yongin Plant No. 2, a worker employed by the principal contractor died in April last year after his neck became trapped in a fish cake cooling machine. In June this year, a subcontractor worker died after his neck became trapped in a packaging conveyor. Immediately after the June accident, Ourhome CEO Tae-won Kim said, ‘As CEO, I offer my deepest apologies, regardless of the circumstances,’ and pledged to conduct emergency safety inspections at all workplaces.

However, the inspections identified two instances in which conveyors were operated without undergoing legally required safety inspections. Six of the nine factories either failed to provide mandatory special safety training for conveyor operators or provided it late. Of the 46 workers who did not receive the training, 44 were employed by subcontractors. Inspectors also uncovered the illegal dispatch of 45 workers from second-tier subcontractors for work on production lines.

The Ministry of Employment and Labor said fatal accidents had repeatedly occurred at Hanwha affiliates, including Ourhome and Hanwha Aerospace, and that it would direct the group to implement company-wide improvement measures and conduct follow-up inspections. At Hanwha Aerospace’s Daejeon facility, explosions in 2018, 2019 and this year killed a total of 13 people. Minister of Employment and Labor Young-hoon Kim described the findings as ‘evidence that the companies are failing to fulfill the social responsibilities commensurate with their size and standing.’

■ Dong Seon Kim Becomes Largest Shareholder of Holding Company Above Ourhome…Buys 81.1 Billion Won Worth of Shares From His Older Brothers

Ourhome is a company in which Woorijip F&B, established by Hanwha Hotels & Resorts, holds a 50.62% stake. Hanwha Hotels & Resorts is under Hanwha M&S, a holding company created through a spin-off from Hanwha Corporation last August.

Kim is the third son of Hanwha Group Chairman Seung Youn Kim. At the ‘Ourhome Vision 2030’ declaration ceremony last May, he personally explained the significance of the acquisition and outlined the company’s future plans in his capacity as Head of Future Vision. He currently serves as an unregistered executive, rather than a registered director, of Hanwha M&S.

According to the Financial Supervisory Service’s electronic disclosure system, Kim purchased 22,975,541 common shares of Hanwha M&S at 8,000 won per share, for a total of 183.8 billion won, through the first tender offer, which ended on the 2nd. His ownership stake jumped from 5.81% to 32.99%, making him the largest shareholder ahead of Hanwha Energy, which holds 23.94%. His stake also exceeds the 12.24% held by his father, Chairman Seung Youn Kim.

Of the shares purchased, 10,143,000 were sold by his two older brothers. The eldest son, Hanwha Group Vice Chairman Dong Kwan Kim, sold 6,762,000 shares worth 54.1 billion won, while the second son, Hanwha Life Vice Chairman Dong-Won Kim, sold 3,381,000 shares worth 27 billion won. The two brothers’ ownership stakes fell to 2.55% and 1.81%, respectively. Hanwha Energy, the second-largest shareholder, is a company in which Vice Chairman Dong Kwan Kim holds a 50% stake.

Under the second tender offer, Kim plans to purchase 3,380,000 shares at the same price by the 30th, using up to 27 billion won of his own funds without borrowing. If the offer is fully subscribed, his ownership stake will rise to 36.99%. In the filing, Kim stated that the purpose of the purchase was ‘to strengthen responsible management and enhance shareholder value.’

Ourhome has stated that it takes the inspection findings seriously and will prepare measures to prevent similar incidents from recurring. The group-wide improvement measures demanded by the Ministry of Employment and Labor have yet to be announced.