LOTTE-GROUP/SHAREHOLDERS MEETING Younger son of Lotte founder strengthens grip on conglomerate

Record ID: 143705

  • Title: LOTTE-GROUP/SHAREHOLDERS MEETING Younger son of Lotte founder strengthens grip on conglomerate
  • Date: 17th August 2015
  • Summary: TOKYO, JAPAN (FILE - 2015) (REUTERS) LOTTE GROUP HEADQUARTERS SIGN READING (English) "LOTTE" WINDOWS OF THE LOTTE HEADQUARTERS
  • Embargoed: 1st September 2015 13:00
  • Keywords:
  • Location: Japan
  • Country: Japan
  • Topics: General
  • Reuters ID: LVA3FZXJCK3MO170DH784YEDCGP6
  • Aspect Ratio: 16:9
  • Story Text: The younger son of the Lotte Group's founding family has strengthened his hold on the South Korean conglomerate amid a bitter succession feud with his elder brother, winning the backing of shareholders at a key Tokyo-based holding company.
    An extraordinary shareholders' meeting on Monday (August 17) at unlisted Lotte Holdings approved a proposal calling for the company led by co-CEO Shin Dong-bin, the younger son of 92-year-old founder Shin Kyuk-ho, to establish a stable management structure and strengthen its corporate governance.
    The vote had been closely watched to see if Dong-bin, who is also the chairman of Seoul-based Lotte Group, would muster sufficient support after his elder brother Shin Dong-joo said he and his father were opposed to Dong-bin gaining sole control of the conglomerate.
    Dong-joo, who is also known by his Japanese name Hiroyuki Shigemitsu, apologised for the family after the shareholders meeting.
    "I would like to apologise from the bottom of my heart to the many people who use our Lotte products, to those who are clients of our distribution network, to employees and their families for having created a lot of problems and worry due to the misunderstanding in our family," said Dong-joo.
    "I stood beside what I believed in and would like to continue to do so along with my employees and customers. That's it," he told reporters before leaving.
    Many long term Korean residents in Japan traditionally use Japanese names when in Japan. The founding father, who began his business in Japan right after the war, is also known as Takeo Shigemitsu and the youngest son is known as Akio by the Japanese press. Both Dong-joo and Dong-bin were born and educated in Japan.
    The conglomerate, with operations that span retail, confectionery, hotels and chemicals, had until last year been divided between the two brothers with the younger running the much bigger South Korean operations and the elder running the Japan businesses.
    The elder son appeared to fall out of favour early this year but later seemed to have regained his father's support. Family infighting escalated in July after the father and elder son flew to Tokyo to dismiss the board at Lotte Holdings - an attempted coup that failed after the younger son sacked his father as co-CEO of the Japan-based firm.
    Lotte Group has since said that the founder has "difficulties making judgments". Thirty-seven CEOs at Lotte's South Korean units have also publicly voiced their support for Dong-bin.
    Lotte Holdings did not immediately offer a breakdown of how close the shareholder vote was. A spokesman said the father did not attend the meeting.
    About one-third of Lotte Holdings is held by employees, another third owned by subsidiaries or associations and the remaining third is held by an investment company that the Shin family controls, Dong-bin said last week, adding that he himself held only 1.4 percent.
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