Son demotes dad in battle for control of company
03 August 2015, 14:03
Seoul - A family battle for control of South Korea's largest retailer has erupted in public after the group's 92-year-old founder was demoted to a powerless role in the business by his youngest son.
Shin Dong-bin, 60, has been trying to solidify his control of the Lotte conglomerate, which has businesses in South Korea, Japan, China and Southeast Asia, in the face of opposition from his older brother Shin Dong-joo, 61, and his father Shin Kyuk-ho.
Shin Dong-bin on Monday said his brother and father had attempted to sack him as chairman of Lotte but their efforts had no legal standing.
In response to those maneuvers, Lotte had earlier demoted Shin Kyuk-ho to honorary chairman, from general chairman overseeing Lotte's businesses in Japan and South Korea. It said the demotion was necessary to prevent the 92-year-old from being manipulated by people seeking control over the company.
Family-owned business conglomerates dominate South Korea's economy. Feuds that spill outside the inner circle provide the public with an occasional glimpse into the inner workings of business empires that for the most part are opaque and unaccountable.
Samsung chairman Lee Kun-hee fought a long legal battle with his older brother over their inheritance and the sons of the Hyundai founder battled each other for control of the group during their father's last years.
Shin Kyuk-ho, one of the many Koreans who migrated to Japan when the Korean peninsula was under Japanese rule, founded Lotte as a chewing gum maker in Japan in 1948.
It grew into a retail behemoth with businesses spanning the region. But Lotte generates most of its revenue in South Korea where it operates the country's largest discount and department store chains as well as hotels a chemicals business. Its holding company, Lotte Holdings, is based in Japan.
Footage broadcast Sunday by television channels showed a fragile-looking Shin Kyuk-ho slowly reading a prepared speech saying that he never appointed his younger son as a leader at South Korea's Lotte group and Japan's Lotte Holdings.
Lotte said Shin had been manipulated by his oldest son, Shin Dong-joo, into delivering a misinformed message. It described the 92-year-old as having difficulty making sound judgments due to his age.
Shin Dong-joo was a vice chairman at Lotte Holdings until he stepped down at the end of last year. He told local media that he was confident of gathering enough shareholder support to appoint new directors at Lotte Holdings who would reinstate his father.
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