Lotte’s Chief Shin Dong-bin Testifies at Assembly
Lotte’s Chief Shin Dong-bin Testifies at Assembly
  • By Monica Youn-soo Chung (monica@koreaittimes.com)
  • 승인 2015.09.18 14:43
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Lotte Group Chairman Shin Dong-bin testified at the National Assembly audit on Thursday, the first time that a chief of Korea's top 10 conglomerates appeared on the audit.

On the day, shareholding structure of Kwang Yoon-sa, an obscured packaging company based in Tokyo set up by founder Shin Kyuk-ho, was revealed. Four members of the royal family including Shin Dong-bin own 99.6 percent of shares, and Dong-bin's shares of the firm account for 38.8 percent of the total.

Park Byung-suk, lawmaker of the main opposition party New Politics Alliance for Democracy said during the audit, "Kwang Yoon-sa is de-facto family company owned by Shin's family," adding that, "Dong-bin has 38.8 percent shares, the older brother Dong-joo has 50 percent, their mother Shigemitsu Hatsuko has 10 percent and the founder Kyuk-ho has 0.8 percent."

According to Park, 99.28 percent shares of Lotte Hotel, the de-facto holding company of Lotte Group, are owned by Japanese subsidiaries. L Investment, a Japan-based Lotte unit, is the largest shareholder with 67.2 percent. Lotte Holdings owns five units of L Investment's total 12 units. Then, Kwang Yoon-sa again owns 28.1 percent shares of Lottel Holdings.

When Park asked about any possibility that Dong-joo's having 50 percent shares of Kwang Yoon-sa may threaten the management of Lotte Group,” Dong-bin replied, "It will not be a problem because (I am) supported by (Lotte’s) holding company and executives."

He also said that there will be no more dispute over management of the group with his older brother Dong-joo.

Asked about separating Lotte Japan from the group and entrusting it to Dong-joo, he dismissed the idea, saying, "Lotte Korea and Japan should go hand in hand in a bid to create synergy and to increase shareholder value. The separation is not a good idea."

Regarding the heated controversy about Lotte Group’s nationality – whether it is Korean or Japanese company - Shin said, "Lotte is a Korean company and the fact will not be changed in the future," adding that, "We are paying taxes based on Korea's commercial law and the employees are also Koreans."

As part of his efforts to settle the controversy, he stressed that Lotte Hotel will be floated soon in Korea. "Lotte Hotel plans to be listed on the Korea's stock market in the first half of next year," adding that, "Korean shares of the hotel will be increased to more than 50 percent in the future."

Currently, 99 percent of Lotte Hotel's shares are owned by Japanese companies including Lotte Holdings. Dong-bin said, "Regarding why Lotte Hotel should go public, I already told the founder Kyuk-ho and received 100 percent approval from him."

He added, "However, the details of listing procedures will be decided by the general meeting of stockholders."

As an issue of mutual growth with partner companies was pointed out, he said the company would put more efforts.

When Shin Dong-woo, lawmaker of ruling Saenuri Party, said, "Lotte should grow together with its partner companies instead of only focusing on profit-making," the chief of Lotte said, "We will reflect our wrongdoings and become a better company down the road."

On the same day, Jeong Jae-Chan, chairman of the Korea Fair Trade Commission, also appeared at the national assembly audit session.

When Kim Ki-joon, lawmaker of NPAD, asked, "Who do you think controls Lotte Group now" Jeong replied, "It seems to be Shin Dong-bin based on media reports. Under these circumstances, (Dong-bin) seems to control the management."

He also said, “We are currently reviewing the shift of the company’s chief position from the current founder Kyuk-ho to Dong-bin next April.”


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