Lotte Group founder Shin Kyuk-ho has stepped down from management, ending his 70-year rein over the group. Japan Lotte Holdings, the holding company of Lotte Groups in Korea and Japan, held a regular shareholders’ meeting on June 24 at its headquarters in Shinjuku, Tokyo, Japan, on June 24 and approved a reshuffle, eliminating founder Shin, who has just ended his term, from the board of directors. The move ends founder Shin’s 70-year business career — the establishment of Lotte Co., a gum maker and predecessor of Lotte Group, and catapulting it with the dedication of the Lotte World Tower, a 123-story skyscraper in Seoul. Founder Shin steps down from the board of directors and serves as honorary chairman.
Founder Shin resigned from the board of directors of Lotte Confectionary and Lotte Hotel last year. This March, he stepped down from the board of directors of Lotte Shopping and other Korean major subsidiaries of the group in succession. Currently, founder Shin retains only the status of a director of Lotte Aluminum with his term, to be expired in August, but he is most likely to resign from the position. The shareholders’ meeting of Japan Lotte Holdings also turn down all proposals, including former Japan Lotte Holdings vice chairman Shin Dong-ju’ ones to appoint himself and others, and the ones to relieve current executives, including Lotte Group Chairman Shin Dong-bin, from the board of directors.
Lotte Group Chairman Shin is embroiled into a management dispute with his elder brother Shin Dong-ju, who has repeatedly attempted to regain his control over management under the pretext of restoring the honor of founder Shin.
But founder Shin’s stepping down from the board of directors of the holding company will likely undermine ex-vice chairman Shin Dong-ju’s room to maneuver over management. On the other hand, the latest shareholders’ meeting of the holding company will serve as an opportunity to solidify Lotte Group Chairman Shin’s management foundation as one leader of the group in celebration of the 50th anniversary of the group. Chairman Shin declared a package of management reform last October under the “New Lotte” vision with a focus on fundamental management and social responsibility rather than external growth.
In particular, Chairman Shin is to make a fresh start by moving from his office in Sogongdong, downtown Seoul, to his new office of the newly opened Lotte World Tower in celebration of the 50th anniversary. The Management Innovation Office, the control tower of the group, and major subsidiaries of the group, including Lotte Chemical, are to be moved there.
While delivering a speech at a ceremony to open the Lotte World Tower, Chairman Shin said, “Lotte has been devoting itself to giving happiness to customers and contributing to the development of the national economy since founder Shin established Lotte Confectionary in 1967 50 years ago. The Lotte World Tower is not only a symbol of Lotte Group, but also a landmark of Korea, he added.
The latest shareholders’ meeting of the holding company has retained eight directors, including Lotte Chairman Shin and tow outside directors, a group official said. It served as an opportunity to reconfirm shareholders’ trust over Chairman Shin and current directors, he added.