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| Lotte Group Chairman Shin Dong-bin |
Some observers believe that Lotte Group Chairman Shin Dong-bin's resignation from Lotte Hotel was made to lessen his influence over Japanese major shareholders. This would make it easier to list the firm publicly on the Seoul bourse, thereby tightening his leadership role within the Lotte enterprise.
Shin, who became CEO of Lotte Hotel in 2015 resigned Dec. 31, 2019, but still remains as an unregistered director.
The resignation was "an effort to strengthen responsible management," Lotte Group said, resulting from a Supreme Court decision to suspend Shin's prison sentence in October 2018.
But market watchers believe Shin's move is, in part, to help to publicly list Hotel Lotte as a means to tighten his grip within the conglomerate.
Listing Hotel Lotte will complete Shin's reform of corporate governance that shows Japanese firms having a controlling stake.
Currently, over 99 percent of Lotte Group's shares are owned by Japan's Lotte Holding and other Japanese Lotte subsidiaries.
"The so-called New Lotte plan will improve transparency in corporate management and identify Lotte Group as a genuine Korean firm," said Shin.
If Lotte Group goes public, the company can reduce the Japanese firm's influence by selling their stocks or issuing new ones. It is expect to drop the Japanese stockholder's share below 50 percent, which will naturally free the conglomerate from their control.
Shin was indicted for bribing Choi Soon-sil, a close confidante of former President Park Geun-hye, to win government support to grow the group's duty-free business.
This led to a delay in the tycoon's plan to seek a public offering of Lotte Hotel on the Korea Exchange in 2016.
Time is needed for the process to take effect as Lotte Corporation needs to boost the performance of its duty free business.
In order to solidify the chairman's control over the company, it needs to merge Lotte Hotel with Lotte Corporation, after the listing. It also needs to stabilize its market price.
The chairman also stepped down from the top post at Lotte Engineering & Construction last month, but still heads Lotte Corp., Lotte Confectionery and Lotte Chemical.
