SEOUL, Aug. 29 (Korea Bizwire) — Four affiliates of South Korea’s retail giant Lotte are set to hold their shareholder meetings Tuesday to vote on setting up a holding firm through a division and merger of the units, a move widely expected to strengthen its chairman’s control over the business group.
The country’s fifth-largest conglomerate has pushed to split each of the four listed firms — Lotte Shopping Co., Lotte Chilsung Beverage Co., Lotte Confectionery Co. and Lotte Food Co. — into investment and business entities.
After the split, the investment entities will be merged into one holding company in what many analysts say will tighten Lotte Chairman Shin Dong-bin’s grip over the conglomerate, which has sprawling businesses in South Korea and Japan.
Lotte says that under the proposed scheme, the group’s cross-shareholding among affiliates will be reduced, thus making its governance structure more transparent and efficient.
A group of individual shareholders, meanwhile, have objected to the plan, saying the move is aimed at passing on business risks of Lotte Shopping to the three other affiliates.
If approved, the new holding firm scheme will be launched in early October.