S. Korea’s Lotte family rivals flock before vote
Friendly powers of Lotte Group founder Shin Kyuk-ho are flocking together to secure their collective influential stake under the secondgeneration leadership of the 90 trillion won ( US$77 billion) business empire.
The founder’s recently ousted eldest son Shin Dong-joo appealed to his relatives and the public in South Korea, while his younger brother — Lotte Chairman Shin Dong-bin — has been persuading Japanese investors for support at the yet-to-be scheduled Lotte Holding’s shareholders meeting. The kin are divided over their support, hoping for their voices to be heard in the company that encompasses Asia and the U.S.
Lotte Holdings in Japan
is the de facto holding company of Lotte Group. Both Dong-joo and Dongbin are reported to have equal stake in the company, and winning the support of other shareholders will be crucial for the feuding brothers.
On Friday afternoon, the siblings’ uncle and Sansasu Shoji CEO Shin Sun-ho arrived from Japan at Gimpo International Airport. The official reason for his visit was to attend the annual remembrance service of his father Shin Jin-su, but he didn‘t hide his true intentions, publicly siding with Dongjoo, who was divested of Lotte Holdings’ presidency and replaced by Dong-bin on July 16.
“Honorary Chairman Shin Kyukho thinks he has been robbed of control (of Lotte) by his second son. To him, the legitimate heir (of Lotte) is Dong-joo,“Shin Sun-ho told reporters in Seoul.
Sun- ho was expected to be joined in Seoul by the brothers’ cousin and sports unit Lotte Giants CEO Shin Dong-in as well as by their elder sister, Young-ja, who are also part of the “pro-Dong-joo” faction. Their mother, Shigemitsu Hatsuko, also flew in from Japan to attend the ceremony, and is reportedly calling for a truce between the brothers.
The Shin clan was expected to hold a meeting after the annual ritual, but the plans collapsed Friday morning when Dong-bin suddenly called off his attendance. The rest of the family have reportedly held discussion, but the content remains undisclosed.
“The chairman is engaged in several affairs in Japan. We are not sure whether he will return by the end of the week,” a Lotte spokesman said.
‘Makes us doubt whether he is
able to think straight’
“This could be a serious problem because Shin Kyuk-ho values his father’s remembrance service and could take this very personally. This may affect not only the senior Shin, but other members who may think Dong-bin is shunning them. It may become Dong-bin vs. the others,” a Lotte insider said.
The fraternal feud was taken to a new level Thursday and Friday when Dong- joo held an interview with local broadcaster KBS claiming that Shin Kyuk-ho was planning to reinstate him as the group’s crown prince.
He suggested a pile
of docu- ments directed by the senior Shin sacking Dong-bin and his aides from the executive position of Lotte Holdings. It also orders Dong-joo to be reinstated as the president of Lotte Holdings.
In an audio file, the senior Shin is distinctively upset after reported by Dong-joo that Dong-bin was still working at Lotte Holdings and orders to “stop him whatever it takes.”
“Everyone is saying that Tuesday’s mayhem is a coup under my orchestration. But this has been my father’s desire for a while,” he said.
Lotte Group, which is firmly under the control of Dong-bin for the moment, lambasted the statement and even blamed the senior Shin’s senility for causing the fiasco.
“Let alone the legitimacy of the documents that have not even gained approval from the board members, the fact that the general chairman has even thought of this makes us doubt whether he is able to think straight over the matter,” a Lotte official was quoted as saying.
“The general chairman always uses stamps when making orders, but here he used his signature. This means that something wasn’t normal when he signed it,” he added.
Lotte Group had earlier commented that the senior Shin had been talked into the scheme without knowing the truth. The company also said that even if Shin Kyukho’s willingness is serious enough to constitute a general chairman’s order, the board of directors’ decision is more ligitimate.
Meanwhile, industrial experts noted that the public antipathy toward the fraternal feud was taken to a new level after Dongjoo’s Thursday interview held in Japanese portrayed his inability to communicate with Koreans. On Friday’s revelation, the father Kyuk-ho and Dong-joo converse in Japanese, even calling each other by Japanese names.
Though both Dong-joo and Dong-bin hold Korean nationality, rumors have been rampant that they cannot speak Korean and lack understanding in the country’s culture and businesses.
“People have once again realized that the heads of Lotte are more Japanese than Korean and are deeply disappointed. The stock prices started to go unstable, reflecting the sentiment, and whoever wins, this isn’t helping anyone,” a market insider was quoted as saying.