Lotte Group Chairman Shin Dong-bin’s elder brother has signaled that the sibling rivalry that led to a series of boardroom coup attempts and a reorganization isn’t over yet at South Korea’s largest retail conglomerate.
Sibling Shin Dong-joo called for his younger brother’s “prompt resignation and dismissal” following Shin Dong-bin’s conviction on Tuesday on bribery. Lotte Corp. said it had no comment on Shin Dong-joo’s statement.
Shin Dong-bin was sentenced to 30 months’ jail time, leaving a leadership vacuum at a hotels-to-chemicals conglomerate that has struggled to move past a family feud between the two sons of founder Shin Kyuk-ho.
The jailing may leave an opening for Shin Dong-joo, who failed to take control of the group in 2015 via a boardroom coup, to regain some influence over the company’s future.
“Fundamental reforms in corporate governance are an indispensable and urgent topic for Lotte group,” Shin Dong-joo wrote in a February 13 statement on the web site of a Japan-based organization he owns. “We take it as a sign of the stronger need to normalize the management of Lotte, and a swift resolution of the current crisis for the sake of Lotte employees, their families and stakeholders.”
Shin Dong-joo’s statement didn’t say whether the call is for Shin Dong-bin to resign from his position as chairman of Lotte Group, the group’s main holding company, or to step down from his role in Tokyo-based unit Lotte Holdings Co., where the elder Shin owns 33.3 percent of voting rights.
Last year Shin Dong-bin executed a reorganization that grouped parts of four of Lotte’s largest listed units into Lotte Corp., a holding company. The revamp boosted his authority and reduced cross shareholdings among the companies.
“The market thought Shin Dong-bin’s battle over management control with his older brother had been settled after the launch of Lotte Corp.,” Heo Pil-seok, chief executive officer at Midas International Asset Management in Seoul, said on Tuesday. “Now, however, this is not a situation that he can relieve.”