The Korean government is vowing to launch an investigation into Lotte Group... to find the answers to questions that have long swirled around its opaque management system.
This as the group, one of Korea's biggest conglomerates, is in the midst of a messy family feud.
Shin Se-min reports.
Is Lotte Group a Korean or a Japanese firm?
The question has long hung over the company,... as key information about its corporate governance structure is veiled in secrecy.
In terms of structure,… Lotte Holdings, a company based in Japan, dominates the entire group, with its shares held through cross-shareholding agreements.
Lotte Holdings is in turn under the control of an unlisted firm, Kwang Yoon Sa Corporation, which has the largest stake in Lotte Holdings at more than 27-percent.
In other words, the metaphorical head of the group, Lotte Holdings, is in Japan, while the body, Lotte Hotel and other Lotte affiliates, is in Korea.
The founder of Lotte Group, Shin Kyuk-ho, is believed to have a major stake in Kwang Yoon Sa Corporation, and may have passed some of his shares on to his two sons.
But all of the details surrounding the dominating firm are unclear.
Under Japanese law, neither Kwang Yoon Sa Corporation nor Lotte Holdings have to reveal their shareholder lists.
In addition, Kwang Yoon Sa, the group's de facto holding company, is not listed on the stock market, making it hard to know who owns shares and how much they hold.
Korea's Fair Trade Commission has vowed to review the shareholding structures of Kwang Yoon Sa and Lotte Holdings,… the Japanese firms at the heart of the questions about the group's corporate governance structure.
The ruling Saennuri Party and the government have also vowed to devise reforms to eliminate the outdated corporate governance structure, which allows the firm's founding family to dominate the entire group.
Shin Se-min, Arirang News.