Lotte Group’s family feud is escalating as two sons of the conglomerate founder are bracing for a final showdown to seize control of the 112 trillion won ($97 billion) business group.
Lotte chairman Shin Dong-bin, the younger son of founder Shin Kyuk-ho, and eldest son Shin Dong-joo both expressed confidence in winning at the coming crucial shareholders vote.
Group insiders said the two brothers have entered a new phase of the tug-of-war to woo support from shareholders of the Japan-based Lotte Holdings, the de facto holding firm of Lotte Group.
“It was father’s will to sack Dong-bin from Lotte Holdings in Japan. I will propose a senior executive-level reshuffle during the shareholders meeting,” Dong-joo said during an interview with Japanese daily Nihon Geizai Shimbun published Thursday.
Dong-joo’s move came days after his attempt to oust Dong-bin from the holding company failed in the face of the younger brother’s counterattacks against him and his father.
The two competitors each separately claimed they have the upper hand in attracting more votes.
Dong-joo said he has secured more than two-thirds of Lotte Holding’s voting rights by adding his father’s 33 percent and its employees’ combined 32 percent stake.
But Lotte Group in Korea refuted Dong-joo’s claims.
“The decision to nullify the dismissal of six senior executives, including Dong-bin at a board meeting of Japan Lotte Holdings on July 28 could not be made possible without having more favorable shareholders (toward Dong-bin than Dong-joo),” Lotte Group said in a press release.
The date for the next shareholders meeting has not yet been fixed.
“Dong-bin has secured 20 percent of friendly shares and 12 percent of employees’ shares on the top of 19.1 percent of his own shares. Five of the board directors also support him,” a Lotte official said.
In January, Lotte Holdings removed Shin’s eldest son from all his executive positions at Lotte’s Japanese businesses and replaced him with his younger brother — who has been managing Lotte’s businesses in South Korea — as president this month.
The fierce battle for succession between the siblings surprised many as observers believed that the move was made to spare the group from a potentially damaging family feud, crowning the second son as the father’s successor.
Dong-joo said his father was angry that his second son didn’t report on the performance of Lotte Group in Korea and business in China, resulting in his backing the eldest son.
But Seoul-based Lotte officials said that it’s a groundless assertion and Shin has been deciding the scale and directions of investment for business projects in China.
Founded in 1948, Shin made his company into a confectionery giant in Japan and a sprawling business empire in South Korea.
By Park Han-na (hnpark@heraldcorp.com)
