Namyang Dairy Products will be sold to a private equity fund following controversial claims about the effects of its yogurt drink against COVID-19.

The company disclosed on Thursday that it signed a contract selling all shares owned by its biggest shareholder, former chairperson Hong Won-sik, and his family to Hahn & Company, which also confirmed the stock purchase in a press release.

Hong, his wife and sibling own a combined 53 percent of the company's shares, which will be handed over for 310 billion won by the end of August at the latest. Hahn & Company said it will seek to improve the governance structure for a management overhaul of Namyang Dairy. 

The Hong family is believed to have decided to sell off the firm in the wake of the controversy surrounding the popular yogurt drink Bulgaris. In a recent seminar, Namyang's research chief claimed the drink reduces the chances of COVID-19 infection by 78 percent. 

The claim went on to boost sales but experts and health authorities questioned its credibility which led to a consumer boycott. The firm is under police investigation for violating food labeling and advertising laws while Hong stepped down early this month to take responsibility.