A local court denied the preliminary injunction filed by the late Hanmi founders' sons—Coree Group Chairman Lim Jong-yoon and Hanmi Fine Chemical CEO Lim Jong-hoon—to halt the issuance of new shares to OCI Holdings.

The merger between Hanmi Pharmaceutical Group and OCI Group is currently led by Hanmi Science Chairwoman Song Young-sook, who is the mother of the two Lim brothers, and Hanmi Science Strategic Planning Office Head Lim Joo-hyun, their sister.

The decision marks a significant turning point in the contentious merger talks between Hanmi and OCI.

The court's decision followed the brothers' attempt to prevent Hanmi Science, the holding company of the Hanmi Group, from issuing approximately 240 billion won ($178.9 million) worth of new shares to OCI Holdings.

The ruling was based on the lack of evidence to substantiate the necessity and urgency of preserving the rights that the Lim brothers claimed to hold.

In its ruling, the court emphasized that "if a corporation decides to issue new shares to a third party to easily raise the necessary funds according to the conditions of the capital market, thereby enhancing management efficiency and corporate competitiveness, such issuance cannot be invalidated merely because it occurred in the context of a management rights dispute."

However, it also noted that if the purpose of such a share issuance was to influence the company's control or management rights, it should be considered invalid.

The court recognized the lengthy and careful deliberation by the company's board, including the search for investment companies over a two-year period, as warranting respect for the board's management decisions.

It highlighted the company's need for operational funds, citing the scale of the debt, the debt-to-equity ratio, the demand for funds for new ventures, and investments in drug development and patents.

While the court acknowledged that the motivation behind the merger decision might be related to the inheritance tax payment needs of Hanmi's Chairman Song and others, it stated, "It seems to be for the chairman's personal benefit, but it's hard to say it disadvantages other shareholders definitively."

Regarding the court's ruling, the two brothers expressed disappointment and stressed their intention to appeal immediately.

"We are very disappointed with the court's decision," the two Lim brothers said in a press release. "We will do our utmost to organize the shareholders' meeting on Thursday and other means to once again show that the merger of Hanmi and OCI is unjust, and to ensure that the right board of directors is formed and return the company to its original state."

On the other hand, Hanmi Group welcomed the decision.

"We believe the court's decision was made after deep consideration regarding the desperate situation and that there is no realistic alternative except the merger with OCI Group to leap forward as a global Big Pharma while preserving Hanmi Group's identity as a world-class R&D and drug development company," the company said. "With the support of the shareholders on Thursday, we will continue to pursue the integration unwaveringly and reward them with high shareholder value."

Meanwhile, the family's legal battle stemmed from a January decision when OCI Holdings acquired a 27 percent stake in Hanmi Science through a 770.3 billion won investment, making it the largest shareholder, while Song's daughter and others acquired a 10.4 percent stake in OCI Holdings.

The move was contested by the Lim brothers, who argued against the merger's financial and strategic rationale, given Hanmi Science's record performance and no urgent need for financial restructuring.

The parties have presented sharply contrasting views, with Hanmi Science citing the urgent need for capital due to comparatively low liquidity and quick ratios, while the Lim brothers countered by pointing out the inconsistency of claiming financial instability while acquiring approximately 10 billion won worth of treasury shares in October last year.

Divergent perspectives also emerged regarding the strategic intent behind the proposed share issuance. Hanmi Science advocated for the merger with OCI Holdings, citing the latter's extensive international network as a crucial asset for Hanmi's global expansion efforts.

In contrast, the two sons contended that OCI's business domain was entirely distinct from Hanmi's, arguing that no tangible business benefits or synergies could be derived from the integration.