Lotte chairman once again overwhelms elder brother’s challenge

[THE INVESTOR] Lotte Group chairman Shin Dong-bin has once again won the support of the Japanese shareholders of Lotte Holdings, the group’s de facto holding company, in a vote on Saturday.

Dong-bin has prevailed in two previous shareholders‘ meetings, including one in March cemented his hold on Lotte over his elder brother Dong-joo.

The latest shareholder meeting was held at the request of Dong-joo, the former vice president of Lotte Holdings and Dong-bin’s elder brother. They are both sons of Lotte founder Shin Kyuk-ho who since 2015 have been locked in a feud for control over Lotte.

“It is regrettable that my proposal (to dismiss Dong-bin) did not made it through the shareholders’ meeting,” Dong-joo said after the gathering, adding he will seek to win in a future shareholders‘ meeting.

Earlier, he said he would continue to hold meetings until he can push his younger brother out.

Dong-joo has been calling for the dismissal of Dong-bin and Lotte Holdings President Takayuki Tsukuda on the grounds that he is the Lotte successor chosen by his father.

Dong-bin, on the other hand, argues that his father, 93, was not mentally fit enough to make sound judgements. The Lotte founder is currently in a hospital, being treated for various illnesses.

Dong-bin’s landslide victory came as Lotte, South Korea‘s fifth-largest conglomerate, has come under a high-profile investigation over allegations of illegal slush funds and other shady business practices.

The snowballing probe has hampered many of Lotte’s key business projects, including plans for an initial public offering of Hotel Lotte that had been scheduled for June.

The IPO of the hotel and duty-free operator was the key reform pledge the Lotte chairman has made to improve the murky governance structure of the business empire following an acrimonious succession battle with his elder brother.

Now, the group’s bid to renew the license for the duty-free outlet in the 123-story Lotte World Tower also stands on shaky ground as senior Lotte officials are under suspicion of receiving kickbacks in return for signing up a local cosmetics company at the outlet.

(theinvestor@heraldcorp.com)