SEOUL, Aug. 3 (Korea Bizwire) — Shin Dong-bin, the younger son and heir apparent of Lotte Group founder Shin Kyuk-ho, pledged Monday to do his best to resolve a bitter family conflict over control of the retail empire whose business spans from amusement parks and hotels to department stores in South Korea and Japan.
“It is my role to resolve the crisis and swiftly normalize and improve the companies, following in the footsteps of the general chairman’s entrepreneurship,” Dong-bin told reporters after arriving in Seoul from Tokyo, pledging to do his best to end the family feud.
Dong-bin returned to South Korea for the first time since he began sparring with his brother Dong-joo and father in a sink-or-swim battle to control the business empire, which reaps more than 80 trillion won (US$69 billion) in annual sales in South Korea alone.
In a sign of apology, the younger son bowed down and said he feels “very sorry,” but still stressed that his father’s order dismissing him from the board of Lotte Holdings, the Japan-based holding firm that effectively controls the group, is “invalid in legal terms.”
The younger son, then, headed to Lotte Hotel in central Seoul to hold a 5-minute meeting with his father, according to Lotte Group, headquartered in Seoul. The group said they did not discuss the ongoing crisis and did not clarify other attendees.
Dong-joo, who was set to leave for Tokyo to drum up support from allies ahead of a crucial shareholder vote at Lotte Holdings, reportedly canceled his trip, leading to speculation that the Lotte scions may be meeting their father in Seoul.
Dong-bin’s return marks the latest development in the saga that took a drastic and nasty twist after Dong-joo, backed by the support of some other family members, flew their 93-year-old father to Tokyo in a scheme aimed at sacking key board members, including Dong-bin, from Lotte Holdings.’
Dong-joo was ousted from key positions at the group’s Japan-based affiliates in January, while Dong-bin took the helm at Lotte Holdings last month, in a seemingly smooth power transition from the founder to his younger son, who has fostered the group’s Korean operations into the country’s fifth-largest conglomerate.
The plan soon backfired as Dong-bin declared the move illegitimate and went on to dismiss his father as general chairman of the holding firm. Since then, the fight between the two brothers has escalated into an all-out power struggle between the founder and his younger son.
In footage shown by Korean broadcaster SBS, the founder said he had never appointed Dong-bin as the heir of Lotte Group and added that he “cannot understand nor forgive (him) for excluding his father who has nurtured Lotte Group,” implying that he will take all measures, including legal lawsuits, to dethrone his younger son.
Dong-joo vowed to reinstate his father as general chairman and chief executive as well as the board members who had been ousted for siding with him in his efforts to win support ahead of a tentative shareholders meeting at Lotte Holdings. The schedule for the shareholders’ meeting is yet to be decided.
He also unveiled the rapidly souring ties between his father and his younger brother, mentioning how his father had rebuked and lashed out at his younger brother for omitting to report massive losses at the group’s subsidiaries based in China and Hong Kong. They have not met following the incident, he added.
Dong-bin, in turn, has been stepping up his offensive against his father and older brother, saying that his brother “arbitrarily” took Kyuk-ho to Japan, despite Kyuk-ho “having problems with his mental and physical ability,” according to a July 30 statement released by Lotte Group.
On Sunday, a close confidante of Dong-bin voiced confidence in winning a potential legal fight, saying the court is likely to nullify the certificates of appointments and orders released by Kyuk-ho.
Shares of Lotte Group weakened across the board as investors stepped to the sidelines on growing concerns over corporate management.
Lotte Chemical tumbled 13.63 percent, while Lotte Shopping and Lotte Chilsung Beverage each lost 3.17 percent and 6.85 percent. The KOSPI moved down 1.07 percent to 2,008.49 on Monday.
Market watchers had earlier believed that the brothers, both in their 60s, would each head the group’s operations in South Korea and Japan.
Lotte was founded as a confectionery in postwar Japan in 1948. Kyuk-ho later expanded the business into his home country when normalized diplomatic ties between Seoul and Tokyo enabled foreign business investments.
Unlike their father who was born in the port city of Ulsan, 414 kilometers south of Seoul, both Dong-joo and Dong-bin were born and raised in Japan by a Japanese mother.