South Korea’s antitrust watchdog will disclose information on the cobweb-like ownership structure of retail giant Lotte Group this month following a bitter family fight over control of the country’s fifth-largest conglomerate, a source said Thursday.
The Lotte Group, the businesses of which range from retail and food to construction and chemicals in both Korea and Japan, is mired in a leadership dispute between group founder Shin Kyuk-ho’s two sons — Dong-joo and Dong-bin — who had each controlled the company’s operations in Japan and Korea.
While Dong-joo was ousted from key positions in Japanese units, Dong-bin took the helm of Tokyo-based Lotte Holdings, the group’s holding firm, after winning support from Japanese shareholders in August.
The two brothers then exchanged blows through the media, including lawsuits and stock purchases, fighting to keep the strongest grip on the company.
The Fair Trade Commission has looked into the stock ownership of affiliates of the Lotte Group including its overseas units, since the family row shone a light on its opaque cross-shareholding network last year.
“We will disclose information about the Lotte Group’s governance structure, including its overseas units, within this month,” said a source from the FTC.
The watchdog had ordered the company to submit related data on its corporate management structure.
The Lotte Group’s management has been under fire for its murky structure as it listed only eight companies in Korea, and the core units, including Hotel Lotte, its de facto holding company, are linked through unlisted Japanese units.
The shareholders of the small Japanese firms remain largely shrouded in darkness because they are not subject to Korea’s financial disclosure rule.
Founder Shin Kyuk-ho is believed to be behind the retail giant’s cobweb-like structure through his stake in Kojunsha, the virtual holding firm of the Lotte Group, and other small investment firms.
On the sidelines of the information disclosure, the FTC will take punitive action if the Lotte Group handed out incorrect information or misled the authority’s inspection, according to the official. (Yonhap)
