Lotte Holdings held a board meeting on Wednesday and accepted Shin Dong-bin’s resignation, following a Japanese tradition of convicted chief executives stepping down, the group said in a statement. But Mr Shin will retain his post as vice-chairman of Lotte Holdings and the move will not affect his status in Lotte’s Korean units, the group added.
Lotte Holdings is at the heart of the retail-focused conglomerate’s complex ownership structure and indirectly controls the group’s key businesses in South Korea such as Lotte Hotel and Lotte Chemical through cross shareholdings.
Mr Shin’s resignation as chief executive of the holding company comes after a South Korean court sentenced him to two-and-a-half years in prison for bribery, in a stern warning to the country’s political and business elites. Mr Shin was found guilty of offering Won7bn in bribes to foundations of the long-time confidant of former South Korean president Park Geun-hye in return for political favours.
Lotte said Mr Shin’s resignation would likely have a negative effect on business cooperation and synergies between the group’s South Korean and Japanese operations.
Mr Shin is appealing the court case. However, his legal troubles could reignite a family dispute over management control at South Korea’s fifth-largest conglomerate and slow its group-wide restructuring efforts.
Lotte officials are also concerned that Mr Shin’s detention could undermine Lotte’s major investment plans as the group grapples with ballooning losses in China.
