Shin Dong-bin Named CEO of Japanese Holding Company
Lotte Group is expected to resume its stalled push for governance reform as group chairman Shin Dong-bin has recently been named as the CEO of Lotte Holdings, the holding company of Lotte companies in Japan.
Shin restored his control of Lotte’s Japanese operations as he resumed the CEO post of Lotte Holdings in a year. The Japanese holding company’s board of directors elected Shin as CEO on Feb. 20.
By becoming Lotte Holdings CEO, Shin has solidified his control over Lotte’s entire operations in Korea and Japan.
Lotte Holdings in Japan virtually controls Lotte’s operations in Korea via Hotel Lotte, which controls many of Lotte Group affiliates in Korea. However, as Shin seized control of Lotte’s operations in Japan, Lotte Group in Korea is expected to resume the process to separate itself from Lotte Holdings.
Lotte Group is pushing for an initial public offering (IPO) of Hotel Lotte, while Lotte Holdings is promoting an IPO of Lotte Co., the confectionery unit in Japan. Shin is expected to speed up the two IPOs. Hotel Lotte is a key affiliate in Lotte Group’s corporate governance structure as it holds a majority stake in Lotte affiliates, including Lotte Property & Development, Lotte International and Lotte Rental. For this reason, listing Hotel Lotte is essential to creating a new governance structure with Lotte Corp., the group’s new holding company, at the top.
Business analysts say that Shin will exert managerial control through joint management with the top management of Lotte Holdings in Japan. Shin resigned as CEO of Lotte Holdings on Feb. 21, 2018 when he was behind bars after being arrested for bribing former President Park Geun-hye. Since Shin’s arrest, Lotte Holdings has been run by Takayuki Tsukuda, CEO of Lotte Holdings. Since Shin’s comeback as CEO of Lotte Holdings, Lotte Holdings has been jointly managed by Shin and Tsukuda.
Shin could restore his top post at Lotte Holdings due to the company’s strong business performance under his control. Facility investment swelled by 70 percent and Lotte enjoyed an average growth rate of 108 percent in the confectionery business in Japan in one year since Shin began to manage Lotte Holdings in 2015.