Hahn & Co., the nation's largest private equity firm based on assets under management, secured control over Namyang Dairy Product on Thursday, following years of legal disputes.

The Supreme Court sided with Hahn & Co., ordering Namyang Dairy Product Chairman Hong Won-sik and his family members to hand over their 53.08 percent stake in the company to the private equity firm.

With the court decision, the equity manager is to become the dairy firm's largest shareholder, while the Hong clan is to step down from management for the first time in 60 years since the company was founded.

After becoming embroiled in various controversies related to management that heightened in 2021 with the false advertising of its yogurt drink product Bulgaris, Hong pledged to take responsibility and step down from his chairmanship.

He further decided to transfer the controlling shares owned by him and his family to the buyout firm for 310.7 billion won ($237 million) through a share purchase agreement sealed in May 2021.

Though the transfer was supposed to be completed soon, Hong later called for a revocation of the deal in September 2021, asserting breaches of the agreement. In response, Hahn & Co. went to court, winning both the initial trial and an appeal.

"We welcome the Supreme Court's ruling," Hahn & Co. said in a statement shortly after the ruling was announced. “The long dispute has been settled and the only remaining procedure is for Hong to carry out the stock transfer.”

“We have delivered the message that (Hahn & Co.) is willing to settle payment (with Hong) at any time, with the hopes that he will be cooperative in the transfer of shares and management rights,” lawyer Kim You-bum from Hwawoo, who represented Hahn & Co., told the press.

Though the battle over sales of the stake has wrapped up, legal risks associated with Hong continue. One of the major disputes will be severance pay.

Activist fund Tcha Partners, which owns a 3 percent stake in the company, has been demanding the company refrain from giving out an excessive amount of severance pay for Hong and some executives.

“Hong’s severance pay is assumed to be at around 170 billion won,” the firm said, adding the amount could lead to “irrevocable damage” for the dairy company.

Hong also faces another lawsuit filed by Hahn & Co. in 2022 for not carrying out his end of the bargain. Hahn & Co. demanded 50 billion won in compensation from Hong for dragging out the deal.

Having won the lawsuit, the equity firm is set to work on normalizing Namyang Dairy’s management. Under the looming leadership void, the dairy firm posted an accumulated operating loss of 28 billion won in the third quarter of last year.

“After a swift execution of the stock transfer, we will be making plans to improve the management of the company with its employees, earning back the trust of consumers and making a new Namyang Dairy,” Hahn & Co. said in a statement.

Following the ruling, Tcha Partners further urged Hahn & Co. to go for a tender offer, buying minority shareholders’ stakes in Namyang Dairy for 820,000 won per share, the same price as the stock purchase deal it had signed with Hong.

Namyang Dairy shares closed at 590,000 won on Thursday. Though the share price had remained at around 450,000 won for a few months, it jumped in late December when the Supreme Court fixed the ruling date for Thursday.