Lotte Home Shopping announced that its annual general meeting on the 13th approved a resolution to change the board composition from five Lotte representatives and four Taekwang Industrial (003240) representatives to six Lotte representatives and three Taekwang Industrial representatives.
With the board composition shifting from 5-to-4 to 6-to-3, Lotte can now unilaterally pass special resolutions that typically require two-thirds approval.
"Expanding the number of outside directors is an unavoidable measure to strengthen the board's independence and transparency in decision-making against Taekwang's groundless claims," Lotte Home Shopping said. "They are disrupting normal business operations through repeated nitpicking, raising new issues whenever previous matters are resolved."
The two companies have been in conflict since January, when the Lotte Home Shopping board rejected an "internal transaction approval" agenda item related to transactions with Lotte affiliates due to Taekwang Industrial's opposition. Taekwang Industrial subsequently demanded the resignation of Lotte Home Shopping CEO Kim Jae-gyeom.
"We will take all legal measures against groundless claims or actions that damage the company's reputation," Lotte Home Shopping said. "At the same time, we will focus more on strengthening our core business competitiveness based on a stable management environment."
Lotte Home Shopping maintains that Taekwang Industrial has been disrupting normal business operations through "repeated nitpicking," raising issues including the resale of the Yangpyeong-dong headquarters building, dismissal of the CEO, discontinuation of Lotte brand usage, and suspension of affiliate transactions—then bringing up new issues whenever previous matters are resolved.