Shin Dong-bin, Chairman of Lotte Group, Accelerates Efforts to Secure Funds for Inheritance Tax

Lotte Chemical Stock Fully Sold
Estimated Personal Inheritance Tax of 200 Billion KRW
Likely to be Paid in Six Installments Over Five Years

[Asia Economy Reporter Jo In-kyung] Shin Dong-bin, chairman of Lotte Group, has sold all of his Lotte Chemical shares to Lotte Holdings. This is interpreted as a move to prepare for inheritance tax on the assets inherited from the late honorary chairman Shin Kyuk-ho.

Secured 25.1 billion KRW by Selling Chemical Shares

On the 28th, Lotte Holdings announced that it acquired all 90,705 common shares of Lotte Chemical held by Chairman Shin through an off-hours block trade. The acquisition price per share was 277,500 KRW, and the total acquisition amount was 25,170,637,500 KRW. After the acquisition, the number of shares owned by Lotte Holdings increased to 8,771,257 shares, raising its stake to 25.59%. Chairman Shin no longer holds any shares in Lotte Chemical after selling all his shares.

Lotte Holdings explained the purpose of the stock acquisition as "improving management efficiency through additional acquisition of subsidiary shares." Considering Lotte Chemical's recent performance and dividend policy, it is judged that this will enhance Lotte Holdings' profitability. A Lotte Holdings official stated, "By stabilizing the holding company system through share acquisition and strengthening responsible management of affiliated companies, we expect to increase corporate value." Since its launch, Lotte Holdings has purchased Lotte Chemical shares six times including this transaction.

Lotte Holdings also announced that it will acquire 303,761 shares of Lotte Chilsung Beverage (48 billion KRW), 77,185 shares of Lotte Foods (34.2 billion KRW), and 13,085 shares of Lotte Corporation (8.2 billion KRW). This will be done by participating in paid-in capital increases of three affiliates through in-kind contributions.

Accordingly, as of the 27th, Lotte Holdings' shareholding ratios in listed affiliates are 48.4% in Lotte Confectionery, 39.3% in Lotte Chilsung Beverage, 36.4% in Lotte Foods, 40.0% in Lotte Shopping, 25.6% in Lotte Chemical, and 65.0% in Information & Communications.

Raising Funds for Installment Payment of Inheritance Tax

Chairman Shin inherited shares of group affiliates held by the late honorary chairman Shin Kyuk-ho. This included about 1.41 million shares of Lotte Holdings, 110,000 shares of Lotte Shopping, 120,000 shares of Lotte Confectionery, and 90,000 shares of Lotte Chilsung Beverage, totaling approximately 68 billion KRW based on the stock prices at that time. The total inheritance tax on the entire shares inherited by Chairman Shin, former Lotte Scholarship Foundation Chairwoman Shin Young-ja, and former Vice Chairman of Japan Lotte Holdings Shin Dong-joo is reported to be about 450 billion KRW.

The exact amount of inheritance tax that Chairman Shin must personally pay has not been disclosed but is estimated to be around 200 billion KRW. It appears that Chairman Shin plans to pay the inheritance tax in installments over five years in six payments using an installment payment method, providing the inherited shares as collateral to the tax authorities through the court.

Currently, the shares held by Chairman Shin in listed affiliates are 13.04% in Lotte Holdings (with an additional 8.24% in preferred shares), 10.23% in Lotte Shopping, 1.96% in Lotte Foods, 1.87% in Lotte Confectionery, and 0.48% in Lotte Chilsung Beverage (with an additional 8.24% in preferred shares).

This content was produced with the assistance of AI translation services.