“This crisis happened as we failed to put in many efforts to improve our governance structure and bolster corporate transparency during the group’s growth. We will resolutely reform the agendas that have raised concerns among the people of Korea, the government, our shareholders, employees and contractors.”
“I will push for the listing of Hotel Lotte, which serves as the de facto holding firm of the group’s businesses in Korea. I will put in efforts to make it happen in the near future. In addition Lotte Group will try to eliminate about 80 percent of cross-shareholding among its units.”
- Shin Dong-bin, chairman of Lotte Group
SEOUL, Aug. 11 (Korea Bizwire) – Shin Dong-bin, the head of the country’s No. 5 conglomerate, apologized Tuesday over the group’s much-criticized succession feud and pledged to make the retail giant’s murky governance structure more transparent.
Lotte is embroiled in a bitter family fight over control of the sprawling business empire, which has reignited sentiment against family-controlled conglomerates, known as chaebol here, and prompted an all-out government probe into the group.
Lotte has been mired in the family squabble involving founder Shin Kyuk-ho and his two sons, Dong-joo and Dong-bin, who are sparring to bolster their grip on the company whose business spans from luxury hotels to amusement parks, mostly located in South Korea and Japan.
Dong-joo, with the help of his father, attempted to oust his younger brother from Lotte Holdings, the conglomerate’s Tokyo-based holding firm, while Dong-bin has countered by demoting their 93-year-old father from his general chairman post, implying that the founder’s old age has blurred his mental capacity.
In Tuesday’s apology, Shin said he “respects his father very much,” but drew a line between domestic ties and business relations, saying that he is willing to talk with his father and brother on personal matters, but business agendas are a separate issue.
The family feud has expanded into one of the country’s biggest family fights of all time, previously seen among scions of the country’s chaebols, such as Hyundai and Kumho.
Anti-chaebol sentiment has also been building up, which for Lotte translates into a possible boycott of its services and products by consumers, a substantial threat for the heavily retail-focused company.
Adding to the chaos, the company’s corporate history, as well as TV footage of the family calling each other by their Japanese names, has spurred anti-Japanese sentiment against the conglomerate that was founded as a confectionery in postwar Japan. Its holding firm and the little-known investment units are also located in the neighboring country.