Lotte Group creates task force to speed up structural reforms

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Lotte Group creates task force to speed up structural reforms

Lotte Group is speeding up structural governance reforms that Chairman Shin Dong-bin promised two weeks ago during a public apology following a management dispute with his older brother.

Lotte Group said Wednesday that it has launched a task force that will be entirely focused on a structural overhaul. Lee Bong-chul, head of the group’s support department, will head the team.

“Vice President Lee is the best person to be in charge of the reform, including a Lotte Hotel IPO, because he has expertise in managing group financial affairs,” a Lotte Group official said.

The major reform projects include a Lotte Hotel IPO, resolving the complicated cross-share holdings of stock among Lotte affiliates, converting the conglomerate to a holding-company system and enhancing management transparency.

Lotte Hotel turned in an IPO request to authorities on Aug. 19, and will choose a company to manage the IPO in September.

The market estimates that it will cost Lotte Group as much as 7 trillion won ($5.8 billion) to convert it into a holding company and resolve cross-share holdings among 81 affiliates.

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