Lotte claims governance becoming more transparent

Lotte Group, South Korea's fifth-largest conglomerate, claimed Tuesday its governance structure has become more transparent, with over 80 percent of its cobweb-like structure streamlined through a series of deals.

Hotel Lotte, its unlisted hotel unit, spent 100.8 billion won ($891.4 million) buying shares of Lotte Shopping, a key retail unit, and two other affiliates, removing their cross-shareholding ties with 209 other companies. 

The latest move is a follow-up measure after Lotte chairman Shin Dong-bin in August bought a 1.3 percent stake in Lotte Confectionery Co. worth 35.7 billion won from a construction unit to cut ties between 140 companies.

Lotte said it has untangled 84 percent of 416 cross-shareholding relations among its affiliates.

Lotte had been embroiled in a bitter family fight over control of the sprawling business empire, which shed light on its dense network of cross-shareholdings and prompted an all-out government probe into the group.

Lotte, whose businesses range from retail and food, to construction and chemicals in Korea and Japan, has listed only eight companies in Korea and the core units are linked through unlisted Japanese units.

Shareholders of the small Japanese firms remain largely shrouded in darkness because they are not subject to Korea's financial disclosure rule.

As part of efforts to improve its governance structure, Lotte is currently preparing to list Hotel Lotte on the Seoul bourse. (Yonhap)