Lotte chairman scores ultimate victory
The long-running family feud between Lotte Group Chairman Shin Dong-bin and his older brother Dong-joo has apparently ended after the latter disposed of a large stake in the group’s key affiliate.
The nation’s fifth-largest conglomerate said Thursday that former Tokyo-based Lotte Holdings Vice Chairman Shin Dong-joo sold a 6.88 percent stake in Lotte Shopping — 1.73 million shares — through a block deal for 391 billion won ($342 million).
Group founder Shin Kyuk-ho’s oldest son now holds just 7.95 percent of Lotte Shopping, while his younger brother has 13.46 percent.
The siblings have been fighting for control of the retail giant since July 2015, engaging in a fierce legal battle. But the older brother appears to have accepted defeat in the uphill battle for now, according to industry watchers.
Observers expect Dong-bin will expand his control over Lotte’s holding company in Korea, after merging the group’s affiliates such as Lotte Confectionery, Lotte Chilsung Beverage and Lotte Foods, to resolve their cross-shareholding structure.
“Chairman Shin Dong-bin is seizing control of most affiliates’ boards in Korea and Japan,” Hi Investment & Securities analyst Lee Sang-hun said. “Lotte will improve its management structure faster, as the sibling feud is practically over.”
Dong-joo, however, denied he is abandoning control of the group. SDJ Corporation, a company the former vice chairman established in Korea, said the proceeds from the stock sale will be used to repay his and his father’s debts and to invest in new businesses here.
Some said the older son may buy shares in Lotte Confectionery or Lotte Aluminium, both of which are key subsidiaries sustaining the group’s inter-subsidiary dealings.
But analyst Lee and most others are skeptical, noting that Dong-joo would hardly be able to buy shares in the affiliates with high stakes in sister firms. Lotte Group also said he did not have enough money to buy a meaningful number of shares.
Lotte Group is trying to get Hotel Lotte listed on the stock market and convert its several key affiliates into holding companies. As part of efforts, Lotte recently regrouped its 70 affiliates into four business units and reshuffled top managers.
The conglomerate wrapped up its largest-ever personnel changes on Thursday.