Shin Dong-bin Sells Lotte Chemical Shares Worth 25.1 Billion KRW to Lotte Corporation
[Asia Economy Reporter Yuri Kim] Shin Dong-bin, Chairman of Lotte Group, has sold all of his shares in Lotte Chemical to Lotte Holdings. Lotte Holdings explained that it acquired additional shares in its subsidiary to enhance management efficiency. Industry insiders view this as a move to prepare funds for inheritance tax.
On the 27th, Lotte Holdings disclosed that it purchased 0.26% (90,705 shares) of Lotte Chemical held by Chairman Shin through an off-hours block trade.
The purchase amount totaled approximately 25.1 billion KRW based on the closing price of the day. After the acquisition, Lotte Holdings' stake in Lotte Chemical increased from 25.33% to 25.59%. Chairman Shin no longer holds any shares in Lotte Chemical after selling all his shares.
The company stated that the purpose of the acquisition was to improve management efficiency through additional acquisition of subsidiary shares. Since its establishment, Lotte Holdings has purchased Lotte Chemical shares six times to date. The company added, "Considering Lotte Chemical's recent performance and dividend policy, this will benefit Lotte Holdings' profitability," and "We believe this will stabilize the holding company system, strengthen responsible management of affiliated companies, and enhance corporate value."
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However, in the business community, it is believed that Chairman Shin sold Lotte Chemical shares to secure funds for inheritance tax. Following the passing of Shin Kyuk-ho, Honorary Chairman of Lotte Group, in January last year, the total inheritance tax payable by the bereaved family in South Korea is estimated to be around 450 billion KRW. The exact amount of inheritance tax Chairman Shin must pay has not been disclosed. However, it is known that he plans to pay the inheritance tax using an installment payment method over five years in six installments, providing the inherited shares as collateral to the tax authorities. Chairman Shin inherited 41.7% of the common and preferred shares of Lotte Holdings, Lotte Chilsung Beverage, Lotte Confectionery, and Lotte Shopping left by his father, Honorary Chairman Shin.
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