Lotte Group Chairman Shin Dong-bin has relinquished his representative rights at Japan's Lotte Holdings after he was sentenced to jail in a bribery case.
His resignation is expected to add further uncertainty to the conglomerate at a difficult time.
Park Soyun reports.
The Chairman of South Korea's Lotte Group has resigned from his co-CEO post of Japan's Lotte Holdings but will remain on its board as vice chairman and director.
The move came after Shin Dong-bin was sentenced to two-and-a-half years in prison in Korea last week over his role in an influence-peddling scandal involving former president Park Geun-hye.
He was found guilty of offering seven billion won or six-point-four million U.S. dollars in bribes to gain a license to run a duty-free business.
At a board of directors meeting in Tokyo on Wednesday, Lotte Holdings decided to accept Shin's offer to step down as co-CEO, leaving Japanese co-CEO Takayuki Sukuda to head the holding company.
Shin will stay on as vice chairman in name only, in efforts to minimize the impact of his extended absence.
Some watchers are concerned that Shin's vacancy may allow the Japan-based holding firm to exert more influence over Lotte Korea.
For the past 50 years, Lotte Group has been operating under a "One Lotte" management policy, with both South Korea and Japan's chiefs in charge of overall supervision in an integrated management system.
Lotte says vice chairman Hwang Kak-gyu will lead in close cooperation with Japan Lotte and actively handle the situation.
Lotte Holdings is a top shareholder of Lotte Hotel and Lotte Chemical, which control Lotte Group's various South Korean businesses.
Shin's resignation may also reignite a family dispute with his older brother.
Shin Dong-joo had earlier said his younger brother should resign his board of director position, saying it's socially unacceptable to manage a business while in prison.
Shin Dong-bin's resignation is expected to hamper Lotte's investment plans and ability to seek new business opportunities to stem losses in China, as well as weaken ties between Lotte's businesses in South Korea and Japan.
Park Soyun, Arirang News.
