By Rachel Lee
Lotte Group Chairman Shin Dong-bin has given up the post of CEO of Lotte Shopping, its key retail unit.
The announcement comes amid the government’s investigations into big retailers for their inter-affiliate dealings, among others. Lotte’s rival Shinsegae is being under probe, and Lotte itself is speculated to be the next target.
According to Lotte Sunday, Shin’s resignation as Lotte Shopping CEO was approved at a shareholders’ meeting held on Friday.
The 58-year-old, however, will keep his seat on the firm’s board, and the CEO post at Lotte Chemical and Lotte Confectionery. Shin was appointed as CEO of Lotte Shoppping in March, 2006.
“The change was made to ensure professional management at Lotte’s affiliates,” a group official said. The retail unit will be jointly headed by Lotte Group founder Shin Kyuk-ho, CEO of Lotte Department Store Shin Heon and Lee YIn-won, a Lotte Group executive, the firm said.
Sources speculate that it is a preemptive move to avoid responsibility amid the government’s tightening regulations for retail businesses by conglomerates, including Lotte and Shinsegae.
“Shin Dong-bin has given up his CEO post to evade responsibility and avoid possible blame, which is followed by the government’s strict controls and investigations on big retailers,” Park Ju-gun, founder of CEO Score, told The Korea Times. CEO Score closely monitors issues related to the country’s conglomerates, global firms and CEOs. “It is seen a similar case to Shinsegae Group Vice Chairman Chung Yong-jin’s resignation last month,” Park added.
Shin is also facing a court hearing next month for ignoring lawmakers’ call to comply with the National Assembly’s probe into possible violations by Lotte regarding inter-affiliate deals. He was asked to attend a parliamentary hearing on the matter last year, but didn’t.
Chung, the 44-year-old vice chairman of Shinsegae Group, gave up his seat last month on the boards of the group and its retail chain E-mart amid an escalating prosecution investigation into allegations of the group’s illegal inter-affiliate transactions and monitoring of unionized workers.
Chung’s departure, however, triggered speculation that he was attempting to evade responsibility for the investigations. Market insiders cautiously predicted that Chung would become the next conglomerate leader in trouble following Hanwha Chairman Kim Seung-youn and former SK Chairman Chey Tae-won, who recently received jail sentences for embezzlement.