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Lotte Chairman to Leave for Japan to Speed up Governance Reform
Next Task for Lotte Chairman
Lotte Chairman to Leave for Japan to Speed up Governance Reform
  • By Yoon Young-sil
  • October 23, 2018, 11:10
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Lotte Group chairman Shin Dong-bin will leave for Japan to discuss with officials of Lotte Holdings Japan how to deal with its financial subsidiaries that need to be sold off within a year to set up a holding company.

Lotte Group chairman Shin Dong-bin will leave for Japan on October 23, his first overseas business trip after his release from prison on Oct. 8. 

According to group officials, Shin will meet with key officials running Lotte's opertions in Japan, including Lotte Holdings chief executive officer Takayuki Tsukuda and chief financial officer Masamoto Kobayashi. At the meeting, they are expected to discuss how to reform the corporate governance structure of Lotte Group’s operations in Korea and Japan.

Shin has been speeding up governance reform by putting 11 chemical subsidiaries, including Lotte Chemical, under the control of Lotte Corp., the group's holding company. The decision was made on Oct. 10, just two days after he returned to work.

Since Lotte Holdings Japan is at the top of the corporate governance structure of the entire Lotte Group, Shin is expected to talk about pending issues with Lotte Holdings officials during his visit to Japan.

Industry watchers predict that Shin’s return to the position of Lotte Holdings CEO, from which he resigned after the imprisonment in February, is the most important issue on the agenda. In order to do that, he needs to hold a board meeting without additional shareholders' general meetings. Since Shin has only a 4 percent stake in Lotte Holdings, he is forecast to meet officials of its subsidiaries, which are a major shareholder, and the workers of the employee association, which is the second largest shareholder.

The business community expects that Shin will discuss with officials from Lotte Holdings Japan how to deal with its financial subsidiaries that need to be sold within a year in a bid to set up a holding company. Some say that Lotte Group can exchange a stake in its financial subsidiaries with a stake in Hotel Lotte owned by Lotte Holdings Japan.