JKL, MBK start tak­ing con­trol of for­mer Lotte units

The Korea Times - - FINANCE - By Park Jae-hyuk [email protected]­re­atimes.co.kr

Pri­vate eq­uity firms (PEFs) that fi­nal­ized their ac­qui­si­tion of Lotte’s in­surance and credit card units have be­gun re­plac­ing the two fi­nan­cial com­pa­nies’ board mem­bers with their own ex­ec­u­tives, in­di­cat­ing the be­gin­ning of new man­age­ment sys­tems.

Lotte In­surance, which was sold to JKL Part­ners, an­nounced Oct. 10 it ap­pointed JKL se­nior man­ag­ing di­rec­tor Choi Won-jin as the new head of the in­surance com­pany.

Choi, a for­mer fi­nance min­istry of­fi­cial who is also ad­mit­ted to the New York Bar, joined JKL in 2015.

Tasked with an ur­gent paid-in cap­i­tal in­crease for Lotte In­surance’s fi­nan­cial sound­ness, the new CEO promised at his Oct. 11 wel­com­ing cer­e­mony that he will fo­cus on re­spon­si­ble man­age­ment for con­tin­u­ous growth of the in­surer’s en­ter­prise value.

Ac­cord­ing to Lotte In­surance, another JKL se­nior man­ag­ing di­rec­tor Kang Min-kyun was also ap­pointed as the in­surer’s non-ex­ec­u­tive di­rec­tor at its Oct. 10 board meet­ing.

Korea En­ter­prises Fed­er­a­tion hon­orary chair­man Park Byung-won, for­mer Fi­nan­cial Ser­vices Com­mis­sion Chair­man Shin Je-yoon and Kook­min Univer­sity pro­fes­sor Yun Jeong-sun were ap­pointed as out­side direc­tors of Lotte In­surance.

MBK Part­ners, which pur­chased Lotte Card, al­lowed its CEO Kim Chang-kwon to stay in of­fice.

Asia’s largest PEF, how­ever, reshuf­fled the card is­suer’s board mem­bers at an ex­tra­or­di­nary gen­eral meet­ing of share­hold­ers Oct. 10.

Kim Kwang-il and Lee Jin-ha, both of whom are part­ners of MBK, were among the new non-ex­ec­u­tive direc­tors of Lotte Card.

The CEO and new direc­tors are fac­ing the task of re­solv­ing con­flicts with Lotte Card’s union, in ad­di­tion to its ba­sic goal of en­hanc­ing the card firm’s en­ter­prise value.

The Lotte Card union has feuded with man­age­ment over job se­cu­rity and com­pen­sa­tion.

Mean­while, do­mes­tic credit rat­ing agen­cies cut credit rat­ings of the in­surer and card is­suer, say­ing they are no longer able to get fi­nan­cial sup­port from Lotte Group since the PEFs’ ac­qui­si­tions.

NICE In­vestors Ser­vice down­graded Lotte In­surance’s bond rat­ing to A- from A0, and Korea In­vestors Ser­vice slashed Lotte Card’s bond rat­ing to AA- from AA.

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