The founder of Lotte Group, who built a gum business into an empire in South Korea, died on Sunday at 98.
SEOUL: Shin Kyuk-ho, who built a chewing-gum business into the hugely successful Lotte Group in South Korea and Japan, only to see his sons squabble over the corporate empire, died on Sunday. He was 98.
The company, South Korea’s fifth-largest business conglomerate, announced the death of Shin, its founder. The cause of his death was not given, but he had been hospitalised in Seoul in recent days for ailments accompanying old age.
Shin was the last of the rags-to-riches founders of South Korea’s major family-run conglomerates, or chaebol, and his death represented something of an end of an era for South Koreans.
Charismatic chaebol tycoons like Shin were credited with engineering the dramatic industrialisation that transformed the country into one of Asia’s leading economies after the destruction of the Korean War in the 1950s.
Like other chaebol founders, Shin’s beginnings were humble.
He was born in a rural village in Ulsan, in the southeast of what is now South Korea, in 1921, when the country was still languishing under Japan’s colonial rule. He was the eldest son of a family with 10 children.
The young Shin had a literary bent, and yearned to become a novelist. He was raising pigs in his village after graduating from an agricultural high school when he decided to stow away in a ship to Japan in 1941 to pursue a literary career there.
In Tokyo, he delivered milk and newspapers during the day while attending college at night. His first serious business venture in Japan, a factory producing cutting oil, a lubricant used in metalworking, was destroyed in an Allied bombing raid during World War II.
Shin never became a novelist, but he named his first successful business, a company that marketed chewing gum, Lotte after Charlotte, the female character in Wolfgang von Goethe’s novel The Sorrows of Young Werther.
He was especially proud of the name Lotte, calling it “the best choice in my life.”
Shin began selling Lotte bubble gum in 1948, after watching US soldiers in postwar Japan handing out chewing gum to children. It was an instant success, and Lotte soon expanded into chocolate and other confections, as well as trading and real estate.
Although prosperous in Japan,
Shin never forgot his roots. He retained his Korean citizenship and lived in both countries, travelling between the two. As soon as South Korea and Japan established diplomatic ties in 1965, he began investing in his home country, building hotels and department stores in Seoul.
Lotte helped spawn, and then benefited from, a rising consumer culture in South Korea as the middle class expanded with the rapid growth of an exportdriven economy.
In the 1980s, Lotte executives objected when Shin began building Lotte World, a landmark hotel, mall and amusement-park complex, in Jamsil, then a sandy wilderness in southern Seoul. They said there was no market there.
But Shin predicted correctly that Lotte World would attract such throngs that the area would have chronic traffic jams.
Today, Lotte is a household name in South Korea, running 90 affiliates that together generate 100 trillion won, or $86 billion, in annual revenues. The name graces hotels, department stores and apartment buildings, as well as nationwide chains of shopping malls, theme parks, movie theaters, duty-free stores, coffee shops and fast-food restaurants.
Shin kept his last promise for his home country — building South Korea’s tallest building — when Lotte completed its 123-storey Lotte World Tower in Jamsil in 2017.
“His generous investment in his war-devastated home country and his dedication helped rebuild South Korea and lay the foundation of its economic prosperity,” the Federation of Korean Industries, a lobby for big businesses, said in a statement on Sunday.
Despite his success, Shin’s reputation was tarnished in his last years.
While he involved his children in the company’s management, he held on to his kinglike control, never establishing a clear heir apparent.
As Shin slipped into dementia, two sons
— his elder son, Dong-joo, who had been put in charge of Lotte’s operation in Japan, and another son, Dong-bin, in charge of Lotte in South Korea — started a winnertake-all tussle for the leadership of the Lotte empire, accusing each other of financial wrongdoings.
Shin Dong-bin, now chairman of Lotte Group, emerged victorious, staging a coup that dethroned his father as chairman of the board of directors at Lotte’s holding company.
But the brothers’ squabbling led to an investigation by South Korean prosecutors, which in turn resulted in the 2016 indictment of Shin, the two sons and other family members on embezzlement, tax evasion and other charges.
A frail Shin appeared in court, in a wheelchair and carrying a cane, but he seemed unable to grasp what was happening.
“Am I indicted? Who indicted me? I own everything in Lotte!” he said at a hearing in 2017. He threw a microphone and wielded the cane as his lawyers escorted him out of the courtroom at the judge’s order.
Shin was sentenced to four years in prison for embezzlement and other charges. But the Seoul court decided not to imprison him because of his poor health. His son Shin Dong-bin was convicted of embezzlement and breach of trust but was allowed to run Lotte after his 20-month prison term was suspended.
Shin’s first wife, who was Korean, died young, leaving Shin with a daughter, Shin Young-ja. He then married a Japanese woman, with whom he had the two sons.
Shin also maintained a common-law marriage with a former winner of the Miss Lotte contest in South Korea. They had a daughter, Shin Yoo-mi.