Lotte chief wins key bat­tle in fam­ily feud

The China Post - - WORLD BUSINESS -

The chair­man of South Korea’s Lotte Group se­cured cru­cial share­holder sup­port Mon­day in his bit­ter strug­gle against his fa­ther and el­der brother for con­trol of the fam­ily run re­tail gi­ant.

Share­hold­ers of Lotte Hold­ings — the group’s Ja­pan- based de facto hold­ing group — ap­proved cor­po­rate gov­er­nance pro­pos­als to be im­ple­mented “un­der the lead­er­ship” of the chair­man Shin Dong- bin, Lotte said in a state­ment.

It said Lotte, the coun­try’s fifth largest con­glom­er­ate, “wel­comed” the vote.

The keenly watched share­holder meet­ing moved a step closer to re­solv­ing a very public feud be­tween Shin, his fa­ther Shin Kyuk- ho and his el­der brother, Shin Dong- Joo.

Lotte — founded in Tokyo in 1948 by Shin Kyuk- ho — op­er­ates a vast net­work of busi­nesses in­clud­ing depart­ment stores and ho­tels in South Korea and Ja­pan, whose com­bined as­sets are worth around US$ 90 bil­lion.

The feud be­gan af­ter Dong- joo and his fa­ther sought last month to dis­miss a group of se­nior Lotte Hold­ings ex­ec­u­tive board mem­bers in­clud­ing Dong- Bin, ques­tion­ing his man­age­ment abil­ity.

But Dong- bin fought back, with the board not only nul­li­fy­ing the dis­missals but also re­mov­ing the fa­ther as co- CEO.

The dis­pute fur­ther es­ca­lated as the two broth­ers ac­cused each other of mis­man­age­ment and ma­nip­u­lat­ing the frail, 92- year- old Shin Kyuk- ho whose men­tal fac­ul­ties have been called into ques­tion.

The com­pany’s board mem­bers as well as the la­bor union voiced sup­port for Dong- bin. But Dong- joo sol­diered on, say­ing he would await the ver­dict from the share­hold­ers.

The fam­ily feud has re­newed public crit­i­cism of the wealthy found­ing fam­i­lies be­hind the South’s fam­ily run con­glom­er­ates, known as “chae­bol.”

Squab­bles over con­trol of the busi­ness em­pires have of­ten made head­lines, prompt­ing public calls to over­haul their gov­ern­ing struc­ture and im­prove trans­parency.

Many fam­i­lies now own a small frac­tion of the groups’ en­tire stake but still re­tain con­trol via a com­plex web of crossshare­hold­ings.

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