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Lotte Group chairman Shin Dong-bin speaks during a news conference at Lotte Duty Free’s logistics center in Incheon on Monday. Lotte Group |
Lotte Group chairman Shin Dong-bin on Monday slammed his father and elder brother for dragging him into another family spat over the company’s management and putting the 90 trillion won ($79 billion) business empire in danger.
“Let me tell you one thing about what happened over the weekend,” the chairman said in a news conference at Lotte Duty Free Store’s logistics center in Incheon, referring to the lawsuits filed by his father Shin Kyuk-ho and elder brother Shin Dong-joo to reclaim the helm of the enterprise. “What is important for me is to enhance transparency in management and improve the governance structure, making Lotte the country’s beloved company. However, the recent tantrums do not help Lotte in anyway and instead only have a negative impact.”
“I will not be perturbed. I will focus on the management and contributing to the nation’s economy,” he said.
Shin Dong-bin’s remark came days after his brother, also the SDJ Corporation chairman, declared a legal war against him Thursday.
Shin Dong-joo, who was evicted from all group affiliates at the Lotte Holdings’ shareholders meeting on Aug. 15, claimed to be the legitimate head of Lotte Group in both Korea and Japan, being the major shareholder of the holding company.
Their father also released an interview Sunday vowing to take legal action to make Shin Dong-bin pay back all the losses he had inflicted from Chinese ventures. The 93-year-old Kyuk-ho, who was dethroned from Lotte’s helm and became powerless, handpicked Shin Dong-joo as his successor.
The patriarch and the eldest son vowed to file civil and criminal lawsuits in both Korea and Japan, projecting a rather long and complicated legal dispute within the family.
Their action could not have come at a worse time for Lotte Group.
The public spat is expected to jeopardize the company’s state license to run two urban duty-free stores in Seoul ― whose original license expires this month.
While the company has been striving to retain the licenses, the mushrooming public antipathy toward the founding family’s feud and obscure governance structure have resulted in politicians pressurizing the government to strip Lotte of the crown jewels ― thanks to the influx of Chinese tourists, Lotte Duty Free posted 4.2 trillion won in sales last year.
Because the rent for Incheon International Airport’s duty-free zone exceeds the profits generated there, the urban duty-free stores are regarded as the only way to sustain the business. Industry insiders claim that should Lotte lose the license to its competitors, such as Doosan, Shinsegae or SK Networks, the company may have to shut down the unprofitable business.
In desperation, Shin Dong-bin was forced to address the media Monday and beg for public forgiveness and support, sources said.
“I swear that I will make Lotte Duty Free the Samsung Electronics of the service industry,” the chairman said at the media event, noting that the company is the world’s third largest duty-free operator following DFS and Dufry.
On Monday afternoon, Kojyunsya, the holding company of Lotte Holdings, the de facto holding company of Lotte Group in Korea and Japan, announced that it would hold a shareholders meeting Wednesday and vote for Shin Dong-bin’s dismissal. Shin Dong-joo owns 50 percent of Kojyunsya and is the largest stakeholder there.
Lotte Group said the voting is likely to end against Shin Dong-bin because he already has solid supporters based there.
By Bae Ji-sook (
baejisook@heraldcorp.com)
