Lotte Family Feud Intensifies as Brother Vows to Depose Chairmanby
Lotte Holdings’ biggest owner to hold shareholder meeting
Agenda includes ousting Lotte chairman from director position
The family-feud at Japanese-Korean retail giant Lotte Group intensified as Chairman Shin Dong Bin’s older brother attempts to oust him from one of the conglomerate’s key companies.
Kwang Yoon Sa will hold a shareholder meeting on Oct. 14 to dismiss Shin from his director position and will hold a board meeting afterward to appoint Lotte founder Shin Kyuk Ho’s older son Shin Dong Joo as chief executive officer, according to an e-mailed statement from the eldest son’s company.
Kwang Yoon Sa, based in Japan, is the biggest holder of unlisted Lotte Holdings Co., which is key to controlling conglomerate Lotte Group because of its various stakes in group affiliates.
Lotte Group said in an e-mail that the changes won’t disrupt management at the retail conglomerate as Shin Dong Joo holds 50 percent of Kwang Yoon Sa, only a minority stake in Lotte Holdings which already showed its majority support for Shin Dong Bin during a shareholder meeting in August.
The move is the latest attack on Lotte’s current chairman, which has become one of the biggest power struggle in South Korea’s corporate dynasties -- known locally as the chaebol -- where the dispute between family members are rarely displayed in public. Last week, the group’s 93-year-old founder sued his younger son and other board members of Lotte Holdings to nullify the patriarch’s July 28 ouster on grounds that he was illegitimately deposed.
In July, Shin Dong Joo, acting through his father, tried to have his younger brother fired from Korea’s largest retail giant only to see the plan backfire as the patriarch became sidelined to an honorary position. He owns 50 percent of Kwang Yoon Sa, which has a 28.1 percent stake in Lotte Holdings.
Though Lotte Holdings is based in Tokyo and has operations in Japan, the group generates the bulk of its business in Korea, where it has 80 affiliates in areas ranging from department stores to amusements parks and hotels with estimated 112 trillion won ($98 billion) of assets. Lawsuits were filed both in Korea and Japan, according to the statement.