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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] Taekwang Industrial, the second-largest shareholder of Lotte Homeshopping, has raised allegations of unfair support for Lotte Group affiliates, while Lotte Homeshopping dismissed the claims as unilateral and vowed to respond in accordance with the law.
On March 24, Taekwang claimed that Lotte Homeshopping has been supporting affiliated companies through practices such as illegal internal transactions, inventory disposal for underperforming affiliates, and preferential allocation of contracts without competitive bidding.
Earlier in the day, Lotte Homeshopping’s board approved the reappointment of CEO Kim Jae-gyeom and the appointment of three outside audit committee members at a meeting held at its headquarters in Seoul.
Taekwang criticized the move, arguing that it removes checks and balances and signals an intention to intensify support for group affiliates. The dispute follows a January board meeting in which approval for internal transactions was rejected due to opposition from Taekwang-appointed directors. Subsequently, Lotte secured control of approximately two-thirds of the board at a shareholders’ meeting earlier this month.
Taekwang further alleged that Lotte Homeshopping has continued large-scale internal transactions despite the earlier rejection and claimed that the company has effectively been used to support Lotte affiliates for nearly two decades, including acting as a “cash source” for financially strained group companies—at the expense of minority shareholders.
It also pointed to recent programming decisions, alleging that Lotte Homeshopping aired around 20 broadcasts this month to help clear inventory of the Samantha Thavasa brand, operated by a Lotte Shopping subsidiary.
In response, Lotte Homeshopping denied the allegations, stating that the claims are “distorted and unilateral.” The company said the appointment of the CEO and audit committee members followed proper legal procedures and ensured independence from specific shareholders. It also emphasized that its affiliate transactions had been previously reviewed and cleared by the Fair Trade Commission.
Regarding the Samantha Thavasa broadcasts, the company said the brand has demonstrated strong sales performance, with average annual order growth of 37% over the past three years and significantly higher order volumes per broadcast compared to other brands, rejecting claims that the programming was aimed at inventory disposal.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
