A key Lotte Group unit backed Chairman Shin Dong Bin’s leadership of the Japanese-Korean retail conglomerate less than a month after sidelining his father.
Closely held Lotte Holdings Co.’s shareholders approved a plan for “stable leadership” under Shin, the company said in an e-mailed statement Monday. Tokyo-based Lotte Holdings is the biggest shareholder of Seoul-based Hotel Lotte Co., which in turn owns large stakes in group affiliates across South Korea.
The move comes less than three weeks after Shin’s older brother, acting through their father the founder, tried to have his younger sibling fired from the Japan unit. That failed maneuver ended with the 92-year-old patriarch of Korea’s largest retail giant sidelined to an honorary chairman position and put the younger son in pole position to lead the group.
“It’s a rebirth of Lotte Group under Shin Dong Bin,” said Park Ju Gun, president of corporate watchdog CEOSCORE in Seoul. “This isn’t the end of the story yet, but the first round of the conflict over succession has at least ended.”
The elder brother, Shin Dong Joo, had been running the Japanese businesses until he was dismissed from Lotte Holdings in January. In late July, he attempted to oust his younger brother, Shin Dong Bin, only to see that plan backfire.
Aside from endorsing the younger Shin, Lotte Holdings also named former Japanese lawmaker Tomoko Sasaki as an external director.
Chairman Shin Dong Bin also expressed thanks to shareholders and employees for their support and pledged to further develop the company, the group said in an e-mail.
He has apologized for the family feud twice in the past month, and on Aug. 11 promised to simplify the group’s shareholding structure. South Korean Finance Minister Choi Kyung Hwan said Aug. 6 that authorities may take a closer look at Lotte’s unclear corporate governance structure.
Shares of Lotte’s listed affiliates were mixed with Lotte Shopping Co. reversing a 4.2 percent gain to fall 1.2 percent by the close of trading in Seoul. Lotte Confectionery Co. gained 0.7 percent and Lotte Chilsung Beverage Co. Ltd. fell 0.4 percent. The benchmark Kospi index fell 0.8 percent.