[Courtesy of Lotte Corp.]
Lotte, South Korea's fifth-largest family-run conglomerate, launched a new holding company named Lotte Corp. by overhauling four key affiliates to enhance corporate governance and transparency in management.
Lotte Corp., co-headed by Lotte Group Chairman Shin Dong-bin and its innovation office chief Hang Kag-gyu, has 42 affiliates under its wing. Lotte said the simplified group structure would enhance transparency and efficiency.
Shin, who has been dogged by a family feud, secured firm group-wide control by holding a 13-percent stake in the holding company with 6.3 trillion won (5.57 billion US dollars) of assets and 4.8 trillion won of capital.
Lotte said the holding company would focus on evaluating group businesses, managing brand licenses, working out new business models and pushing for mergers and acquisitions.
Lotte Shopping, Lotte Chilsung Beverage, Lotte Confectionery and Lotte Food split themselves into investment and business entities each. The investment entities were merged to become a holding firm.
Lotte Shopping and Lotte Confectionery have been the group's flagships by holding stakes in sister units through a complex web of cross-shareholdings. Their role was handed over to the holding company for easy and simplified control by Shin.
The realignment of group structure will be completed after the new holding company absorbed more affiliates. Later, Lotte Corp. will be combined with Hotel Lotte.
Initially, Shin proposed the initial public offering of Hotel Lotte, but the IPO has been delayed due to a family feud and an investigation by prosecutors into Lotte's illegal business activities. The group has also suffered a business setback in China for providing land for a US missile shield. Prosecutors have brought charges against a dozen incumbent and former Lotte executives.
reporter
Lim Chang-won
cwlim34@ajunews.com
