Lotte Group chairman gives up management rights at key Japan holding company (updated)

Lotte

21/02/2018 10:48

* Chairman sentenced to prison last week for bribery 
    * Comes as Lotte struggles with China business 
    * S.Korea, Japan cooperation to "inevitably" weaken -Lotte 
Corp 
 
 (Adds comment from South Korea's Lotte Corp, context on Shin's 
conviction, Lotte's China business) 
    SEOUL, Feb 21 (Reuters) - The chairman of South Korea's 
Lotte Group, who was convicted for bribery last week, has 
relinquished representative rights at a key Japanese holding 
company, adding further uncertainty to a conglomerate reeling 
from a plunge in business in China. 
    Shin Dong-bin will retain his title of vice chairman and 
position on the board of Japan's Lotte Holdings Co Ltd, which 
owns major stakes in many Lotte units, the Japanese firm said on 
Wednesday. 
    Shin is widely seen as the cohesive leader between the 
group's South Korean and Japanese arms, whose operations are 
separate.  
    South Korea's Lotte Corp  004990.KS  said it expected 
cooperation between Japanese and South Korean Lotte units to 
"inevitably" weaken following the development. Executives in 
South Korea will "seek to overcome such a situation" through 
continued communication with management at Japanese units. 
    The development comes as Lotte puts up its China hypermarket 
business for sale, after locals shunned the firm for providing 
land for a U.S. anti-missile system which drew protest from 
Beijing. The sale has prompted Lotte to turn its attention to 
Southeast Asian markets.  urn:newsml:reuters.com:*:nL4N1OM08F 
    Last week, Shin was sentenced to two years and six months in 
prison over an influence-peddling scandal that has rocked South 
Korea's business and political elite. He has appealed the 
conviction.  urn:newsml:reuters.com:*:nL4N1Q32Z0 
    Shin said he wanted to give up his representative rights 
following his arrest and the board of directors agreed, Lotte 
Holdings said in a statement.  
    Representative rights are typically given to top executives 
and grant wide-ranging authority over management matters under 
Japanese corporate law.  
    Lotte Holdings is at the heart of Lotte Group's complicated 
ownership structure and owns stakes in affiliates including 
Hotel Lotte Co Ltd and Lotte Chemical Corp  011170.KS , as well 
as indirectly controlling South Korean-based holding company 
Lotte Corp. 
    Lotte Holdings shareholders' support of Shin is widely seen 
as important to keep at bay a brewing dispute at South Korea's 
fifth-largest business group among its founding family. 
    Shin and his elder brother were engaged in a feud over 
control of the group in 2015, after the brother was removed from 
his positions at Japanese Lotte units. 
    It was unclear whether Shin's relinquishing of 
representative rights reflected a change in shareholder support. 
 
 (Reporting by Joyce Lee in SEOUL, and Sam Nussey and Taiga 
Uranaka in TOKYO; Editing by Christopher Cushing) 
 ((jungyoon.lee@thomsonreuters.com; +82 2 3704 5609; Reuters 
Messaging: jungyoon.lee.thomsonreuters.com@reuters.net)) 
 
Keywords: LOTTE CHAIRMAN/LOTTE CORP KR