Family feud grows bitter over Lotte's leadership

SEOUL, July 30 (Yonhap) -- The feud over Lotte Group intensified Thursday as the founder's two sons clashed over their father's mental health and the right to take the helm of the business empire sprawling in South Korea and Japan ahead of a cial vote.

Lotte Group, South Korea's fifth-largest conglomerate whose businesses span from food and retail, has been mired in a power struggle between the two sons of 93-year-old Shin Kyuk-ho as they were seeking to take the crown in the once-in-a-generation leadership change.

When the eldest son, Dong-joo, 61, was fired from Japan-based Lotte Holdings in January, the younger son Dong-bin was believed to have the upper hand. The younger son, 60, who heads Seoul-based Lotte Group, was appointed as the chairman of the holding firm earlier this month.

This week, the succession scenario took a twisted turn after the first son flew to Japan with his father and claimed in a Japanese media interview that his father dismissed his younger brother from his posts at the Japanese unit.

On Tuesday, however, the board of directors of Lotte Holdings held an emergency meeting and voted to sack the group's founder as chief executive and general chairman, giving his younger son control over the retail giant.

While it is not yet clear whether Shin Dong-bin will gain control of Lotte Holdings through the board room coup to fire his father, Seoul-based Lotte Group has said the matter will be confirmed in an upcoming shareholders' meeting.

The founder's stake is considered as a swing vote as the two sons hold neck-and-neck shares in core affiliates, while relatives' stakes in other non-listed affiliates could matter in the vote. Its date of the vote hasn't been confirmed yet.

In Thursday's interview with broadcaster KBS, Shin Dong-ju unveiled a document signed by his father that the 93-year-old tycoon ordered the firing of Shin Dong-bin and six other board of directors at Lotte Holdings. He also claimed that through a separate document, he was reappointed the head of the Lotte operation in Japan.

"I think (my father) doesn't have any problem in making decisions as a chief executive," Shin said during an interview, refuting Lotte Group's claim that the father has difficulties in making judgments.

A senior Lotte Group official said on condition of anonymity that Lotte Holdings board room's firing of Shin Kyuk-ho proves that Shin Dong-bin has over half of the stakes in the holding firm, saying the upcoming vote will clear the situation.

The family wrangling has lifted Lotte's affiliates on the Seoul bourse on speculation that the brothers will raise stakes to win more votes. Lotte Shopping Co., a retail giant, jumped 13 percent over the past two days.

Lotte started off as a confectionery in Japan in 1948, and Shin established a confectionery unit in his home country in 1967 when renewed ties between Seoul and Tokyo enabled business investments. Shin was born in the southeastern industrial city of Ulsan and married a Japanese woman.

Lotte has grown into a massive group that owns 74 affiliates in 20 countries with its annual revenue reaching more than 80 trillion won (US$68.6 billion).

ejkim@yna.co.kr
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