Chairman Shin Dong-bin of Lotte Group (Photo:Lotte Group)

Lotte Group Chairman Shin Dong-bin emerged as the victor in a management secession feud with his elder brother as Japan-based Lotte Holdings, Lotte’s key holding company of Lotte Units in Korea and Japan held an extraordinary shareholders’ meeting at the Imperial Hotel in Tokyo on Aug. 17 in which Chairman Shin’s proposals, including the appointing of Tomoko Sakaki as an outside director of the board were approved. 

While delivering a public apology on Aug. 11, Chairman Shin promised to list Lotte Hotel, a holding company of Lotte units in Korea as part of the group's efforts to improve the group's governance by solving an imbroglio cross-share holdings of more than 400 subsidiaries.

Earlier, Chairman Shin got a boost in his bid to increase his management control over Lotte Business Group when Lotte Holdings’ CEO and some CEOs of Lotte Group subsidiaries in Korea came forward with their support for Shin.

Shin is embroiled in a power battle with his elder brother.

While meeting with Korean correspondents in Japan at the Imperial Hotel in Tokyo on Aug. 4, President Takayuki Tsukuda of Lotte Hotel Holdings, the epicenter of the latest family feud, reconfirmed a two-top system under which Chairman Shin takes charge in Korea and President Tsukuda is in control in Japan. 

Tsukuda renewed his support for Lotte Chairman Shin after backing him at a July 28 extraordinary meeting of Lotel Holdings’ board of directors on, the de facto holding company of Lotte in Korea and Japan. Lotte Group Chairman Shin Dong Ju summoned the board meeting and retained all the board directors one day after Lotte Group founder and General Chairman Shin Kyuk-ho verbally fired the executives siding with Chairman Shin. 

The media focus turned to the timing of another extraordinary shareholders’ meeting, a watershed in the management control struggle between Lotte Chairman Shin Dong-bin and his elder brother Dong-ju. 

The Lotte Holdings president pointed out that he and Chairman Shin would join forces to prepare for the 70th anniversary of the establishment of Lotte. 

He flatly denied the separation of Lotte in between Korea and Japan.

Tsukuda maintained that the dismissal of former Lotte Holings Vice Chairman Shin Dong-ju was conducted in accordance with corporate governance rules and principles. 

CEOs of 37 Lotte subsidiaries convened an emergency CEOs’ meeting at the 2nd Lotte World in Jamsil, Seoul, and declared their support to Lotte Chairman Shin Dong-bin. President Noh Byung-yong of Lotte Corp. presided over the meeting and issued a statement following the gathering, saying that Chairman Shin is the one to lead Lotte. 

“Lotte Group is not an exclusive property owned by any individual or family, but it is a company that shareholders, cooperative companies, and 180,000 employees share altogether,” the participants said in the statement. “Chairman Shin Dong-bin, who has verified his management capabilities and achieved outcomes for a long time, is the man who has the stuffs to lead Lotte Group.” 

Lotte Chairman Shin Dong-bin maintained a tight business schedule for the second straight day on Aug. 4 since he returned from a trip to Japan on Aug. 3. Upon his return from Japan, he had a brief encounter with his father and Lotte founder before touring a construction site for the Lotte World Tower. On Aug. 4, he dropped by the Lotte Human Resources Development Institute in Osan to give words of encouragement to freshmen employees undergoing an orientation program. Later he toured Lotte Mart Logistics Center and Lotte Mall Suwon Outlet. 

Chairman Shin’s rounds may be construed as his move to calm investors who are jittery over the fraternal strife. He wants to overcome the crisis by demonstrating his standing inside and outside the group, industry analysts speculate. 

The management feud is not the first in the history of Korean family-owned conglomerates. Samsung Group founder Lee Byung-chull handed over managerial rights of the group to his third son Lee Kun-hee, touching off a bitter fraternal feud in the process.