Gwangyunsa Files Lawsuit in Japanese Court to Remove Shin Dong-bin from Lotte Holdings Board of Directors
"Dismissal from Director Position Through Judicial Decision"
About a Month After Last Month's Shareholder Proposal Failed
[Asia Economy Reporter Cha Min-young] SDJ Corporation Chairman Shin Dong-ju (former Vice Chairman of Lotte Holdings Japan) announced on the 22nd that Kwangyunsa, where he serves as CEO and largest shareholder, has filed a lawsuit with a Japanese court seeking the dismissal of Shin Dong-bin, Chairman of the Lotte Group, from his position as a director of Lotte Holdings.
Kwangyunsa stated, "We have filed a lawsuit at the Tokyo District Court demanding the dismissal of Chairman Shin Dong-bin from his director position at Lotte Holdings, targeting both Lotte Holdings and Chairman Shin Dong-bin of the Lotte Group."
Earlier, Chairman Shin Dong-ju had submitted a shareholder proposal in April that included amendments to the articles of incorporation to establish disqualification criteria for directors, targeting Chairman Shin Dong-bin. However, all such proposals were rejected at the regular shareholders' meeting held on the 24th of last month, as shareholders of Lotte Holdings other than Kwangyunsa sided with Chairman Shin Dong-bin.
This lawsuit is also in line with that context. Chairman Shin Dong-ju had previously indicated that he was considering legal action under Article 854 of the Japanese Companies Act immediately after all shareholder proposals to dismiss Chairman Shin Dong-bin from his director position at the Lotte Holdings regular shareholders' meeting were rejected.
Chairman Shin Dong-ju explained, "It is unacceptable from a compliance management perspective for a person who has been convicted in relation to duties at Korean Lotte Group affiliates to hold a director position at Lotte Holdings. Since the dismissal proposal was rejected at the shareholders' meeting, the position must be dismissed through judicial judgment."
He added, "The Lotte Group declares fairness and integrity as one of its codes of conduct and regards compliance with laws, including overseas laws, as an important corporate philosophy. The criminal acts committed by Chairman Shin Dong-bin violate the corporate philosophy, and it is a direct violation of Lotte Group's corporate philosophy for him to hold not only the director position but also the positions of CEO, Chairman, and President leading the group."
In Lotte Holdings Japan, Kwangyunsa holds 28.1%, the employee stock ownership association holds 27.8%, Lotte Strategic Investment (LSI) holds 10.7%, and affiliates hold 6.0%. Chairman Shin Dong-bin holds 4.0%, and Chairman Shin Dong-ju holds 1.6%.
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Chairman Shin Dong-bin was appointed as Chairman of Lotte Holdings at the board meeting in March. The business community evaluated this as a reaffirmation of the Japanese Lotte management's trust in Chairman Shin Dong-bin. Since July 2015, Chairman Shin Dong-ju has attempted six times at Lotte Holdings Japan shareholders' meetings to dismiss Chairman Shin Dong-bin and to reinstate himself as a director, but all attempts have failed.
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