Lotte Homeshopping responded to Taekwang Industrial, its second-largest shareholder, over the claim of "favoring affiliates," saying it "can only be seen as an attempt to disrupt normal company management," and added it "will respond firmly in accordance with the law and principles."
Lotte Homeshopping held a board meeting at its headquarters in Yangpyeong-dong, Seoul, on the morning of the 24th and approved the reappointment of CEO Kim Jae-gyeom and the appointment of three outside audit committee members. Taekwang Industrial countered that this was "an intention to blatantly favor affiliates after removing even the minimum checks and balances."
Immediately after the board meeting, Lotte Homeshopping said in a press release, "In light of a series of recent matters among shareholders, we appointed only audit committee members who are independent and have no conflict of interest with any specific shareholder," adding, "The reappointment of the audit committee members and the CEO is a measure taken through due process." It added, "Affiliate transactions are also a normal business structure that the Korea Fair Trade Commission (FTC) closed without issue."
Earlier, Taekwang Industrial said, "Since immediately after being acquired by Lotte Group, Lotte Homeshopping has been mobilized for 20 years to support Lotte affiliates," adding, "Recently, affiliates have taken on the role of 'cash dispensers,' and performance is rapidly deteriorating."
In particular, it cited the accessory brand "Samantha Thavasa" of Lotte Homeshopping subsidiary Korea STL as a representative example. It claimed that to save the brand, which is in managerial difficulties, Lotte Homeshopping forcibly scheduled 20 broadcasts during March alone. It also claimed that Lotte Homeshopping steered roughly 156 billion won worth of work over the past five years to the logistics affiliate Lotte Global Logistics through private contracts.
Regarding Samantha Thavasa, Lotte Homeshopping countered that "over the past three years, order value has grown an average of 37% annually, and the number of orders per broadcast is also twice as high as other brands." It explained that the delivery company contracts are also conducted through competitive bidding, with CJ Logistics accounting for more than 50%.
Lotte Homeshopping added, "We question whether we must append responses to every instance of distributing a company's official materials by tacking on any claim whatsoever to a legal and fair transaction between corporations," and said, "If it is a normal corporation, it should not just make claims but also explain clear grounds."