Lotte Group, South Korea’s sixth-largest conglomerate, announced that it replaced the CEOs of 18 out of its 58 subsidiaries in its annual reshuffle on Nov. 28. The latest shakeup marks the largest leadership overhaul in the group’s history, following recent rumors of a liquidity crisis at the conglomerate’s chemical subsidiary. Shin Yoo-yeol, the eldest son of Lotte Group Chairman Shin Dong-bin, was promoted to executive vice president of Lotte Corporation.
The reshuffle comes as Lotte Group’s key affiliates grapple with poor performance. Lotte Holdings, Lotte Chemical, and Lotte Duty Free recently entered emergency management systems after earnings declined. Analysts interpret the latest shakeup as a full-scale restructuring effort. “The reshuffle is part of our commitment to fundamentally reforming our management system and speeding up restructuring efforts,” the company said.
Lotte Group has replaced 12 CEOs in 2022, 14 last year, and 18 this year. This year’s reshuffle focused on the chemical and hotel divisions, the group’s core businesses. Around 22% of the group’s executives lost their positions and retired in the latest shakeup.
At Lotte Chemical, 10 of the 13 CEOs were replaced, with only the heads of Lotte Aluminum, Lotte Energy Materials, and LC USA, who were appointed last year, retaining their positions. The division also saw 30% of its executives leave the company. Lee Hun-ki, head of Lotte Chemical, stepped down after just one year.
Once a powerhouse generating over 1 trillion won ($720 million) in annual operating profit from 2015 to 2019, Lotte Chemical recorded a cumulative loss of 660 billion won in the first three quarters of this year. Hotel Lotte, which operates duty-free shops, also saw a complete turnover of its leadership, with new CEOs appointed for all three divisions—Lotte Duty Free, Lotte Hotels, and Lotte World.
The group’s four vice chairmen—Lee Dong-woo of Lotte Holdings, Kim Sang-hyun of Lotte Distribution, Park Hyun-chul of Lotte E&C, and Lee Young-gu of Lotte Foods—retained their positions.
