Lotte Chief Faces Renewed Challenge From Disgruntled Brotherby
Chairman's brother calls for board at Lotte Holdings to quit
Move is latest escalation of public feud that erupted in July
Lotte Group Chairman Shin Dong Bin faced another leadership challenge from his older brother, who escalated the power struggle atop the Korean-Japanese retail conglomerate by launching a campaign to oust a key group unit’s board.
Shin Dong Joo, stripped of executive positions at the group last year after a failed coup attempt, called for Japan-based Lotte Holdings Co.to hold an extraordinary general meeting to put him on the board and oust current directors. Shin, who spoke at a briefing in Tokyo, also showed a video of his 93-year-old father -- group founder Shin Kyuk Ho -- endorsing the elder son to succeed him in running the business empire.
In response, Lotte Group said in an e-mail that Shin Dong Joo should convene a general meeting via legal means instead of calling for one at a press briefing. The group also said that three past meetings resulted in shareholders endorsing current management, including Chairman Shin Dong Bin.
Since the feud erupted into the public view last year, the disgruntled brother has criticized and thrown lawsuits at Lotte management, while the group has defended its current chief’s legitimacy. The case has gripped South Korea, where such struggles at corporate dynasties -- known locally as the chaebol -- are rarely displayed in public.
Though Lotte has operations in Japan, the group generates the bulk of its business in Korea, where it has more than 80 affiliates in areas ranging from department stores to amusements parks and hotels with over 100 trillion won ($83 billion) of assets. Lotte Holdings is a particularly important unit because of its stakes in key affiliates and its role in coordinating group strategy.
At Tuesday’s briefing, Shin Dong Joo also called for Lotte Holdings to pursue an initial public offering to enhance transparency at the group. The move comes as one of the group’s largest companies, Hotel Lotte Co., prepares for what could be Korea’s biggest IPO in years.
Asked about his father’s health and his whereabouts, Shin said the patriarch is very healthy and in Seoul.
While the chairman controls Lotte Holdings, the company counts closely held Kwang Yoon Sa, which Shin Dong Joo says is 50 percent owned by him, as its biggest shareholder with a 28 percent stake.