Lotte Home Shopping expands board, tilting governance balance against Taekwang.
Lotte Shopping’s home shopping unit is locked in a governance dispute with its second-largest shareholder, Taekwang Industry, as the company reported a shift in its board balance at its 25th annual general meeting. The meeting, held on the 13th, approved expanding outside directors, reshaping the board's composition in favor of Lotte.
Under the revised structure, Lotte’s side gains three more seats, bringing its total to six: three inside directors and three outside directors. Taekwang’s side drops to three seats: two inside directors and one outside director. Previously, Lotte had five directors (three inside, two outside) and Taekwang had four (three inside, one outside).
Lotte said the expansion strengthens the independence and transparency of its board in response to what it described as baseless accusations from Taekwang that have hindered corporate management. The company noted it had previously tried to minimize conflict but faced what it described as excessive and unconventional allegations and external complaints.
The dispute has its roots in the 2006 shift of the largest shareholding in Woori Home Shopping, which became part of Lotte Shopping, giving Lotte about 53% ownership. Taekwang Industry remains the second-largest shareholder with roughly 45%. Since then, Taekwang has repeatedly challenged Lotte’s management decisions.
A specific point of contention involves an internal transaction item related to Lotte Group affiliates. Taekwang claims that the item was rejected by the board yet was pushed through, accusing Lotte’s management of violating board approval procedures. The company has disputed this characterization.
At the meeting, CEO Kim Jae-gyum was reappointed as an inside director of Lotte Home Shopping, despite Taekwang’s opposition to his ongoing leadership. Taekwang has indicated plans to push for his removal at an extraordinary general meeting, and, if that fails, to file a dismissal lawsuit in court. Lotte has warned it will pursue all lawful remedies against what it calls unfounded or defamatory claims.
Beyond Korea, the affair matters for U.S. audiences because Lotte Shopping is part of a large, cross-border retail and consumer goods network with extensive supply chains and distribution influence in Asia. Governance instability at a major Korean retailer can affect market sentiment, investment in related assets, and the ability of multinational partners to engage with Lotte’s retail operations. The outcome could also influence how chaebol-linked companies manage board independence, strategic transactions, and dispute resolution, with potential implications for U.S. suppliers, brands, and investors connected to Korean retail platforms.