Lotte shareholders back current head over elder brother

Lotte’s shareholders have backed the current CEO of the group, Shin Dong-bin to manage the huge conglomerate that operates both in Korea and Japan.

The elder brother was present at the meeting on Monday, while their father, the 92-year-old founder, was not.

Shareholders of Japan-based Lotte Holdings approved the proposal at an extraordinary shareholders meeting on Monday.

It was the first shareholder meeting after Lotte Group Chairman Shin Dong-bin became CEO of Lotte Holdings Japan through an emergency board meeting on July 28.

Six executives at Lotte Holdings, excluding founder Takeo, attended the meeting.

“I think one should not let family affairs meddle in management issues”.

The backing represents a major triumph for Dong-bin, the second son of founder Shin Kyuk-ho, who has fought an intense succession battle over control of the retail group that erupted last month.

There were two motions on the table: appointment of an outside director and assurance of management based on rules and principles. During the meeting, participants were set to discuss agenda items such as hiring an external board of directors and improving the group’s corporate governance structure.

Under the plan, Lotte will reduce shares held by Japan-based holding companies in Hotel Lotte, a de facto holding company of Lotte’s operations in Korea, and take the hotel unit public.

Lotte Holdings is an unlisted company and details about its shareholders are not disclosed.

Many families now own a small fraction of the groups’ entire stake but still retain control via a complex web of cross-shareholdings.

In response, the chairman pledged to dissolve 80 per cent of the group’s circular shareholding structure by the end of the year on August. 11.

“Lotte in the both countries will try to enhance its respective performance while creating synergies to increase value in the global market”, Shin Dong-bin said in an official statement via email.

Lotte Group has since said that the founder has “difficulties making judgments”. But Dong-joo soldiered on, saying he would await the verdict from the shareholders. Another one-third is possessed by the group’s employees.

The feud at Lotte Holdings grew serious after Hiroyuki was removed from group executive posts, including the presidency of trading house Lotte Shoji Co., in December a year ago.