Shin Dong-joo, the eldest son of the founding family of Lotte Group that operates in Korea and Japan, has shed most of his stakes in Lotte businesses in Korea as an indication of his surrender in the lengthy and public power struggle against his younger brother Shin Dong-bin, the incumbent chairman of Lotte Group in Korea.
SDJ Corp., where the elder Shin is the chief, said in a statement that Shin was disposing of his shares in Lotte Shopping Co., Lotte Chilsung Beverage Co., Lotte Confectionary Co. and Lotte Food Co. The value of the trade is unknown but could amount to millions of dollars.
Last month, shareholders of the four entities voted to restructure the units under a holding company. The demerger would not only simplify the multi-layered ownership web of Lotte Group but also strengthen the younger Shin’s grip over the retail and food conglomerate.
Shin would be exercising the shareholder’s option to sell shares if one does not agree to management decisions.
Shin has repeatedly opposed his younger brother’s plan of combining Lotte Shopping, which has recently seen massive losses in China, with the other three affiliates. He also demanded Lotte Shopping to immediately pull out of China.
But SDJ stressed that the move does not mean Shin has given up management interest in Lotte.
According to industry insiders, Shin would retain at least 3 percent stake in Lotte Shopping and others to maintain the right to access accounting books of the companies.
Lotte started as a gum and sweets maker in Japan and later expanded to Korea, where it has grown to become the country’s fifth largest conglomerate. Shin Dong-bin ran the Korean business while the elder Shin Dong-joo managed the Japanese side.
In 2015, leadership was consolidated under the younger Shin with the support of shareholders in the Tokyo-based Lotte Holdings. The elder sibling has been trying to restore control through lawsuits, which have been unsuccessful.
Some believe Shin’s stake sale as a conciliatory gesture toward his younger brother to win back management over the Japanese business.
By Sohn Il-seon
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]