Full-Scale Start of Management Succession at Lotte Korea-Japan
Shin Dong-ju's Attempt to Return to Management Fails
"Appointment of Director Shin Yu-yeol Is a Step Backward"
Shin Yu-yeol, the eldest son of Lotte Chairman Shin Dong-bin, has been appointed as an inside director of Japan's Lotte Holdings. This is interpreted as the full-scale commencement of the management succession process between Korean and Japanese Lotte.
According to business and distribution industry sources on the 26th, Lotte Holdings held its regular shareholders' meeting in Tokyo and passed the proposal to appoint Shin as an inside director. A Lotte Holdings official explained, "As the CEO of Lotte Financial, he has deep knowledge of the financial market and is responsible for the Lotte Holdings management strategy office, possessing extensive knowledge and experience in overall company management."
Shin Yu-yeol Executive Director
Shin, who joined Lotte Holdings as a manager in 2020, served as the CEO of Lotte Strategic Investment, a Japanese Lotte affiliate, in 2022, and last year worked as the CEO of Lotte Financial. In March of this year, he was appointed as an inside director of Lotte Biologics, a Korean Lotte affiliate, for the first time. With his recent appointment as an inside director of Japan's Lotte Holdings, he is now listed on both the Korean and Japanese Lotte holding companies.
In the business community, Shin's appointment as an inside director of Lotte Holdings is seen as the formal start of the management succession process. Inside directors participate in the board of directors, which decides important company matters. This means that Shin, who is undergoing 'management training,' will actively participate in the management of both Korean and Japanese groups. Earlier this month, Shin also secured 0.01% of Lotte Holdings shares (about 7,000 shares), marking his first appearance on the shareholder list.
The Lotte governance structure connects Kwangyunsa → Lotte Holdings → Hotel Lotte → Lotte Holdings. Although the influence of Japanese Lotte has diminished with the launch of Lotte Holdings, where Chairman Shin Dong-bin is the largest shareholder, it is necessary to strengthen Japanese Lotte's control considering the group's long-cherished project of listing Hotel Lotte. Chairman Shin has been promoting the 'One LOTTE' strategy, an integrated Korea-Japan management system. Shin Yu-yeol, who joined the board of Japan's Lotte Holdings, is set to continue this legacy.
Shin Dong-ju, Chairman of SDJ Corporation. / Photo by Jin-hyeong Kang aymsdream@
At the shareholders' meeting, the proposal to appoint Shin Dong-ju, Chairman of SDJ Corporation and elder brother of Chairman Shin Dong-bin, as a director was rejected. Previously, in January 2015, Shin Dong-ju was abruptly dismissed from his position as vice chairman of Lotte Holdings, the Korea-Japan Lotte holding company. On July 27 of the same year, backed by the late Shin Kyuk-ho, he attempted to reclaim management control by removing his younger brother Shin Dong-bin from the Lotte Holdings board but failed. Since then, he has tried ten times at Lotte Holdings shareholders' meetings to dismiss Shin Dong-bin as director and reinstate himself, but all attempts were unsuccessful.
After the shareholders' meeting, Shin Dong-ju stated, "The appointment of Shin Yu-yeol, whose abilities have not been verified at all, is a step backward for the times." He added, "Regardless of the shareholders' meeting results, as the largest shareholder of Lotte Holdings, I will continue to demand reforms in the Korea-Japan Lotte Group management system to overcome the crisis and enhance corporate value."
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