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Lotte chief promises transparent management

July 11,2017
The head of Korean retail giant Lotte vowed on Monday to boost the group’s transparent management as it attempts to tide over a string of troubles through a governance shake-up.

During an investor relations session held in Tokyo, Lotte Group’s chairman, Shin Dong-bin, said his company would be able to better adapt to changing market circumstances with transparent management once the revamp plan for its management structure is completed this year.

“Lotte Group will continue with its growth as a trusted company by building a transparent management structure and strengthening compliance,” Shin told a group of Japanese investors including Nomura Securities and Mizuho Bank.

Shin’s remarks came as the country’s fifth-largest conglomerate is suffering from a steep fall in its retail business amid a diplomatic row between Seoul and Beijing over the deployment of a U.S. missile defense system here and a string of malpractices related to its murky governance structure.

Its duty-free business is bearing the brunt of Beijing’s decision to ban tours to Korea in apparent retaliation over deployment of the missile shield, while Shin and his family are standing trial over a string of corporate crime allegations.

The new holding company, probably Lotte Confectionery’s investment entity, will then possibly seek to merge with unlisted Hotel Lotte, the current de facto holding firm of the group, giving Shin a major controlling stake that will solidify his leadership of the family-controlled business empire, industry watchers say.

Yonhap