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Biz News Korea(Eng)
Lotte Group Chairman Shin Dong-bin may lose management control if indicted
- Collected
- 2016.09.20
- Distributed
- 2016.09.21
- Source
- Go Direct
Japan-based Lotte Holdings has control over the Korea-based Lotte Group as it holds 93.8 percent stake in Hotel Lotte Co., the de facto holding company of Lotte Group. Although Shin owns only 1.4 percent stake in Lotte Holdings, he has been able to govern the Lotte affiliates in both Korea and Japan after winning support from other shareholders in Japan such as employee shareholders’ association with a 27.8 percent stake in Lotte Holdings, five affiliates with a 20.1 percent share, executives’ association with a 6.0 percent share, and Lotte Foundation with a 0.2 percent share.
Market observers are concerned that the Japanese shareholders of the holding company would withdraw their support for Chairman Shin if he is indicted. Currently, all five board members of Lotte Holdings are Japanese excluding the incumbent chairman Shin and Lotte Group founder Shin Kyuk-ho. As the head of a company who becomes a suspect of irregularities often resigns or is ousted by the board of directors in Japan, worries are growing that Chairman Shin could be removed from his post if he is arrested, market watchers say.
A bizarre situation in which the control of Korea’s fifth-largest conglomerate with annual sales of 90 trillion won ($80 billion) falling in the hands of a few Japanese executives may become a reality, said a high ranking Lotte officer who asked to be unnamed.
By Sohn Il-seon
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]