Lotte Will Have a New Chairman
A meeting among Lotte Group's shareholders today in Tokyo will confirm the new chairman. And it looks like it will be Shin Dong-bin.
According to inside sources, it is expected that the conference will set the younger Shin's position in the corporation. The board members of Lotte Holdings in Japan have already submitted a proposal during a previous emergency meeting, which also looked into mid and long-term plans, presided by CEO Takayuki Tsukuda. They have named him the head of Lotte's businesses, combining both Korean and Japanese affiliates under one management.
"Chairman Shin [Dong-bin] participated in the board meeting in the form of a conference call", says a high-ranking board member present during the meeting.
Top executives - Tsukuda, Lotte President Hwang Gak-gyu and vice-chairman of Lotte Group Lee In-won - have stated that the "situation is completed" afterwards. This could only mean that the legalities of appointing Dong-bin as the sole leader are in place.
They have decided on this matter after the older brother Shin Dong-joo lost his executive status last year and his vice-chairman position at Lotte Holdings on January 28.
Many believe that the main reason Dong-joo wasn't able to continue winning the favor of other board members was his failures and wrong judgments in transacting business.
One of these was investing 7.6 billion won (800 million yen/ $6.4 million) in a start-up company and Panasonic affiliate that provides inventory management in the second half of 2014. However, it wasn't successful and the financial loss was huge. Other than this, he also lost a big investment overseas though the amount was undisclosed.
After these things happened and Dong-joo had to step down, Dong-bin started to work around the two Lotte's unification while securing his position as chairman despite his older brother's attempt to keep him from running as CEO of Lotte Holdings. He was appointed to this position on July 15. The next day he held an emergency meeting in Korea to announce this. He also asked for support in his plan to manage Lotte's businesses.
Dong-bin talked to executives, saying, "As all the legal process have been well organized, even if some incident occurs, don't mind and give your assistance", according to reports.
To this, the CEOs in Korea discussed ways they could express support, one of which was signing on an A4 paper. By August 4, 37 Lotte affiliate CEOs have pledged their support to Dong-bin.