South Korean conglomerate Lotte Group embroiled in scandalous family feud and corruption probe is speeding up its corporate reform process in hopes to recreate the group image and restore public confidence.

According to Lotte Group on Sunday, the company recently hired global consulting company McKinsey & Company to advise on reforming the group’s policy headquarters, and McKinsey is in the process of preparing the final report after having interviewed key senior executives.

McKinsey aims to deliver its final report by mid-November, and the company together with the consulting firm is known to have reviewed everything even including changing the name of the policy headquarters, said a Lotte Group official who asked to be unnamed.

Lotte Group Chairman Shin Dong-bin pledged to streamline the group’s policy headquarters on top of executing other reforms to improve corporate governance during his public apology delivered last month.

The group’s core affiliates as well as the founding family members came under broad investigation by the Korean prosecutions upon suspicion of creating slush funds among other wrongdoings, and Chairman Shin also faces trial without physical detention on charges of embezzlement and breach of trust.

The current policy headquarters, which was shaped by Shin in 2004 by expanding previous management control tower, has about 300 employees working under seven teams.

The key in overhauling the policy headquarters is how to reduce its influence over the group’s 93 affiliates. Market observers expect the new policy headquarters will be largely downsized after the Seoul prosecutions pointed out that current policy headquarters has too much influence over different subsidiaries’ management decision making process, and Shin also had underscored the needs for the affiliates taking more responsibility in management.

Lotte is expected to soon carry out the corporate restructuring process when it receives the final report from McKinsey and reshuffle its senior executives following the division revamp.

By Sohn Il-seon and Choi Seung-jin

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]