Family battle for control of South Korean retailer

A FAMILY battle for control of South Korea’s largest retailer has erupted in public after the group’s 92-year-old founder was demoted to a powerless role in the business by his youngest son.

Lotte group chairman Shin Dong-bin is in a family battle. Picture: Getty Images

Shin Dong-bin, 60, has been trying to solidify his control of the Lotte conglomerate, which has businesses in South Korea, Japan, China and south-east Asia, in the face of opposition from his older brother Shin Dong-joo, 61, and his father Shin Kyuk-ho.

Yesterday, Shin Dong-bin said his brother and father had attempted to sack him as chairman of Lotte but their efforts had no legal standing.

Sign up to our daily newsletter

The i newsletter cut through the noise

In response to those manoeuvres, Lotte had earlier demoted Shin Kyuk-ho to honorary chairman, from general chairman overseeing Lotte’s businesses in Japan and South Korea.

Family-owned business conglomerates dominate South Korea’s economy. Feuds that spill outside the inner circle provide the public with an occasional glimpse into the inner workings of business empires that for the most part are opaque and unaccountable. Samsung chairman Lee Kun-hee fought a long legal battle with his older brother over their inheritance and the sons of the Hyundai founder battled for control of the group during their father’s last years.

Shin Kyuk-ho founded Lotte as a chewing gum maker in Japan in 1948. It grew into a retail behemoth with businesses spanning the region, operating the country’s largest department store chains as well as hotels and a chemicals business.

On Sunday a fragile-looking Shin Kyuk-ho slowly read a prepared speech saying that he never appointed his younger son as a leader at South Korea’s Lotte group and Japan’s Lotte Holdings. Lotte said Mr Shin had been manipulated by his oldest son, Shin Dong-joo, into delivering a “misinformed message”.