Shareholders on Tuesday gave a go-ahead to Lotte Group’s plan of merging six unlisted companies under holding entity Lotte Corp to simplify the notoriously complex cross-shareholding structure of Korea’s fifth largest conglomerate.

The proposal gained a combined approval rate of 87.03 percent at extraordinary shareholders’ meetings separately held by Lotte Corp., Lotte GRS, Lotte International, Lotte Logistics, Fuji Film Korea, Daehong Communications, and Lotte IT Tech, as shareholders expect the merger would enhance shareholder value, management transparency and efficiency at a time the group has received a another management setback due to the court arrest of group chair Shin Dong-bin after he was found guilty in the first trial for bribery in an influence-peddling scandal that ousted the country’s former president Park Geun-hye last year.

Moreover, the family-run corporate empire that runs business in Korea and Japan is also stricken with another family feud scandal as Japan-based eldest son of the founding family has renewed bid for power after his younger brother was put behind bars.

After the merger, the number of affiliates of Lotte Corp. would increase to 53 from 42 after adding the six companies plus their subsidiaries and be free from cross-shareholding ties.

Following the high-profile sibling feud in 2015, the conglomerate has been trying to untangle the myriad of ownership structure to regain investors’ confidence. Once the reorganization is completed by April 1, the number of subsidiaries with intra-group ownership will be reduced to zero. Lotte had 416 circular shareholding loops as of 2014, the most among the country’s top 10 conglomerates

As of 2:38 p.m. on Tuesday, shares of Lotte Corp. rose 0.63 percent to 64,300 won.

By Lee Han-na and Choi Mira

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