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Lotte Homeshopping headquarters. (Photo: Lotte Homeshopping) |
[Alpha Biz= Paul Lee] Taekwang Group, the second-largest shareholder of Lotte Homeshopping with a 45% stake, has requested the convening of an extraordinary general meeting (EGM) to propose the dismissal of CEO Kim Jae-gyeom, escalating tensions with the company’s largest shareholder, Lotte Shopping.
According to industry sources on March 17, Taekwang Industrial filed a request for an EGM against Lotte Homeshopping (Woori Homeshopping) to place the dismissal of Kim—who also serves as an inside director—on the agenda.
The move is widely seen as a backlash against board changes approved at Lotte Homeshopping’s annual general meeting on March 13.
At the meeting, Lotte Shopping—Lotte Homeshopping’s largest shareholder—passed a proposal to restructure the board, increasing its influence. The board composition was adjusted from five Lotte-recommended directors (three inside, two outside) and four Taekwang-recommended directors (three executives, one outside) to six Lotte-recommended directors (three inside, three outside) and three Taekwang-recommended directors (two executives, one outside).
Taekwang Group has strongly opposed the decision, arguing that it violates prior agreements between the two sides.
The conflict between Lotte Homeshopping and Taekwang Group dates back to 2006, when Lotte Shopping acquired a majority stake (about 53%) in Woori Homeshopping. Since then, Taekwang has repeatedly clashed with Lotte over management issues, including opposition to the purchase of a headquarters building in Yangpyeong-dong, calls for the dismissal of the CEO, demands to stop using the Lotte brand, and requests to halt transactions with affiliated companies.
Taekwang has accused Lotte Shopping of unilaterally managing Lotte Homeshopping, while Lotte Homeshopping maintains that Taekwang has disrupted normal business operations by consistently opposing board decisions and raising repeated objections.
Although Taekwang has secured the required stake to call an EGM, making the meeting likely to take place, the proposal to dismiss the CEO is expected to be rejected, given the current board composition and voting structure.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
