A Better Structure for Lotte Cross Shareholdings
The co-CEO of Lotte Holdings and chairman of Lotte Group, Shin Dong-bin, has announced that the corporation will lessen the shares of holding companies in Japan-based Hotel Lotte - the official holding company of operations in Korea.
"The size of the stakes held by Japanese subsidiaries in Hotel Lotte will be reduced", says Shin on Tuesday during a press briefing at Lotte Hotel Seoul. He also apologized for their family's ongoing feud over who's next in line.
Shin has also talked about their plan of an initial public offering (IPO). They will put Hotel Lotte on an open stock market in the country to improve transparency while diversifying the shareholders.
Lotte Group has other reforms planned such as the creation of a holding company to take charge of its complex cross shareholdings, which will cost approximately 7 trillion won. The corporation currently maintains several subsidiaries to manage its affiliates in Korea and Japan. However, it aims to lessen 80% at the end of 2015.
"Lotte Group will take measures swiftly to improve the cross-shareholding structure and restore corporate transparency". He added, "In the long run, we will eliminate the circular shareholding by introducing a holding company",
"We've discussed the issue [of an IPO] from last year. But, here, the position of board directors [at Hotel Lotte] should be taken into account. So, it's hard for me to say when it will be", answers Shin when questioned about an exact timeframe.
Chairman Shin appeared in front of the press after the corporation became the object of boycott campaigns led by different groups, particularly those that advocate consumer rights. An association of small business entrepreneurs also held a protest rally against Lotte Group, while the public expressed their outrage. The Grand Alliance of Patriotic People criticized the conglomerate for its poor management and ties with Japan. The nationalistic organization gathered in front of central Seoul's Lotte Department Store.
Shin eased the people's sentiment toward Lotte's trade relations by saying that they are running a Korean corporation. He also said that Lotte Holdings in Japan would have a shareholder meeting on August 17 to talk about creating better management strategies and appointing outside directors.
