Lotte Drama
Former Lotte Japan Vice Chairman Shin Dong-joo visited Japan on Aug. 7. There, he is expected to ask for a meeting of shareholders of Lotte Holdings from early this week and file a suit with regard to the appointment of Lotte Group Chairman Shin Dong-bin as the representative director of "L" investment company, without any discussion with Lotte Group Founder and General Chairman Shin Kyuk-ho.
The purpose of the visit is to wrap up the conflict surrounding the succession of management before the group’s business takes a hit from the spread of an anti-Lotte sentiment. Shin Dong-bin is predicted to propose a revision of the articles of incorporation for the group to be able to have an honorary chairman, while Shin Dong-joo is likely to add the replacement of directors to it. Shin Dong-bin can be on the winning side when the former is approved and the latter is not. However, Shin Dong-joo could take control of Lotte Holdings in the opposite case. No matter who wins, a court battle seems to be inevitable.
In the meantime, former Vice Chairman Shin Dong-joo said at an interview before his departure that he would take legal measures with regard to Chairman Shin Dong-bin’s appointment as the representative director of the 12 L investment companies without the consent of the founder. “In order for the representative to be changed from the general chairman, the minutes of the board of directors, written application for registration, and the like have to be submitted to the Ministry of Justice of Japan with the representative director’s signature and the corporate seal on the application,” he said, adding, “However, the general chairman did not give his consent, and thus the process has a legal problem.”
Under the circumstances, the Lotte Group is facing mounting criticism in Korea and Japan alike. More and more people in both countries are criticizing Lotte for its owner-led governance structure that is far from transparent and behind the times, and its vague identity regarding corporate nationality.