 |
The headquarters building of Lotte Home Shopping. (Photo=Lotte Home Shopping) |
[Alpha Biz= Paul Lee] Taekwang Industrial has signaled legal action after its proposal to dismiss the CEO of Lotte Home Shopping was rejected at an extraordinary general meeting of shareholders.
At the meeting held on May 14, Taekwang Industrial, the second-largest shareholder, submitted a motion to remove CEO Kim Jae-gyeom. However, the proposal was voted down due to opposition from the largest shareholder, Lotte Shopping.
Taekwang Industrial stated that it is considering filing for a court injunction to suspend Kim’s duties, as well as pursuing a lawsuit seeking his dismissal, citing alleged illegal activities.
The move signals an escalation in the ongoing management dispute surrounding Lotte Home Shopping. Currently, Lotte Shopping holds a 55% stake in the company, while Taekwang Industrial owns 45%. The two sides have been at odds over control since jointly acquiring the company—then known as Woori Home Shopping—in 2006.
Taekwang Industrial alleges that CEO Kim continued to engage in large-scale related-party transactions with Lotte affiliates—including Lotte Hi-Mart and Korea STL—despite the board rejecting approval for such transactions in January.
The company argues that these actions constitute clear violations of Article 398 of the Korean Commercial Act and Article 38 of the company’s articles of incorporation, which govern related-party transactions.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
