Lotte Group Chairman Shin Dong-bin.(Photos: Lotte Group)

Lotte Group President Hwang Gak-kyu, a member of the board of Lotte Confectionery.

Lotte founder and Chairman Shin Kyuk-ho resigned from the board of directors of Lotte Confectionery on March 25 after 49 years in the role. It was the first time Lotte founder Shin was relieved from the board of directors of one of the group’s subsidiaries.

Lotte Confectionery held the 49th shareholders’ general meeting at the company’s headquarters in Yangpyeong-dong, Yeongdeungpo-gu, Seoul, and appointed President Hwang Gak-kyu to lead Lotte Group’s operation to the board of Lotte Confectionery, who is a close confidant of Lotte Group Chairman Shin Dong-bin, replacing Lotte founder Shin. The board has now changed to one, reinstating Group Chairman Shin, Lotte Confectionery President Kim Yong-soo and newly appointing Lotte Group President Hwang and Executive Vice President Min Myung-ki.

Lotte Group Chairman Shin and other group stakeholders did not participate in the shareholders’ meeting, but Lotte Confectionery President Kim Yong-soo was present. 

President Hwang said at the end of the meeting, “I’ll devote myself to making it a good company according to (founder Shin’s) wishes. (Lotte Confectionery) has to go global.” 

Lotte Confectionery disclosed in its public filing that Lotte founder Shin would resign from the board due to an advanced age. 

Lotte Group President Hwang’s appointment to the board of Lotte Confectionery may be construed as the group’s move to solidify Lotte Chairman Shin’s one-man control of the group’s subsidiaries in Korea and Japan. 

Lotte Group Chairman Shin has chosen Lotte Confectionery as his first salvo to shore up his reign over the group’s subsidiaries and demonstrate his victory in the group’s recent management feud with his elder brother Dong-joo. Group Chairman Shin presided over a recent global food strategy meeting in Tokyo in which he stressed cooperation between Lotte Confectionery and Japan Lotte. 

Lotte Confectionery also approved a measure to split its shares, one of the priciest shares in Korea, during the general meeting. 

‘Transparency is Lotte’s Key Management Tenet’

Lotte Group Chairman announced the group’s New Year message in which he stressed innovation of the group’s corporate culture through management based on transparency and law-abidingness.  

In the message released on Jan. 3, Chairman Shin said, “Amid the sagging national and global economies, our group’s dispute over management rights has caused further trouble. We badly need to go for changes and innovation based on thorough soul-searching this year.”

Chairman Shin wants breaking outmoded practices to be the foremost task to address during the year. He told his executives and staff members to discard the conventional way of thinking, and to forego systems and business strategies that do not yield to changes of the times, and to make preparations for anticipatory responses to change. 

“Today, barriers among businesses are breaking down, with unexpected multidisciplinary convergence having tremendous synergetic effects. We have to explore new opportunities with an open mind and keep a flexible way of thinking, as firms in different businesses, not those in the same businesses, could emerge as our rivals,” he said. 

Chairman Shin repeated his emphasis on management based on transparency and law-abidingness. “Securing management transparency and law-abiding management are core values that Lotte should cherish,” said Shin, adding the group will redouble efforts to enhance its corporate values through sound management activities and devote itself to being reborn as a company honored by the people. He also called for his executive and staff members to take a humble attitude of innovating a corporate culture, lending an ear to inside and outside voices, and not fearing change out of the question, he added.