Lotte Shareholders Vote in Support of Shin Dong Bin at Meetingby
Defeat all measures proposed by older brother Shin Dong Joo
Shin Dong Bin maintains control after seizing power last year
Shareholders of Tokyo-based Lotte Holdings Co., a key unit of Korean-Japanese retail conglomerate Lotte Group, voted to oppose a measure to remove Chairman Shin Dong Bin at an extraordinary general meeting on Sunday.
Family-controlled Lotte Group is in the midst of a power struggle between Shin Dong Bin and his older sibling who was stripped of his executive positions at the Japan unit in January last year. The brother Shin Dong Joo had called for the meeting last month to put him on Lotte Holdings’ board and oust its current directors.
Shareholders denied all measures proposed on Feb. 16 by Shin Dong Joo, Lotte confirmed in an e-mailed statement on Sunday. He had proposed a plan to form a new board of directors for Lotte Holdings with himself as chief executive officer and the two men’s father Shin Kyuk Ho as founder, and for them to also sit at the top of the South Korean business. A spokeswoman at Lotte Group in Seoul said at the time those plans don’t seem achievable.
Shin Dong Joo refused to accept today’s rebuttal and said that he would resubmit the proposals at June’s shareholder meeting, according to a statement provided by SDJ Corp., which represents him.
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.
While the chairman controls Lotte Holdings, the company counts closely held entity Kwang Yoon Sa as its biggest shareholder with a 28.1 percent stake. Shin Dong Joo, who has said he owns 50 percent of Kwang Yoon Sa, had tried to oust his younger brother last July only to see that plan backfire and their father, who started Lotte in Japan in 1948, sidelined.
Among Shin Dong Joo’s proposals last month are a plan for Lotte Holdings to pursue an initial public offering that he said could value the company at 1.1 trillion yen ($9.7 billion), and also to redistribute shares in a key employee association that holds a size-able stake in the Japan unit. He estimates the association owns 27.8 percent of Lotte Holdings’ outstanding shares, making it the second-biggest owner after Kwang Yoon Sa.