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 In addition to the Lotte World Tower rising on the banks of
the Han river, the 92-year-old is also likely to be remembered
for his failure to map out a clear succession plan that has
triggered a feud so intense that it has riveted a nation
accustomed to warring corporate families.
Despite his advancing years, Shin has kept a tight grip on the
retail-to-construction empire he built from a chewing gum maker
67 years ago: employees say he still issues directives, and
until recently toured construction sites, including that of
Lotte World Tower.
But even though his two sons ran Lotte's operations in Korea and
Japan, neither was ever publicly designated as heir-apparent, or
holds a substantially larger stake than the other in the Lotte
units for which public filings are available in South Korea.
Some analysts say the dispute at the group Shin named after the
heroine of an 18th century Goethe novel highlights the perils of
having too few people in control of the big conglomerates, or
chaebol, that dominate Asia's fourth-largest economy.
Succession woes have beset many such firms in recent years.
"The source of all the trouble is Shin Kyuk-ho's unwillingness
to pass on management control through succession, his belief
that he must hold on until the end," said Park Ju-gun, head of
corporate analysis firm CEO Score.
The fight over Lotte, whose South Korean units generated $70
billion in revenue last year, appears to have started late last
year, only to erupt into the public domain last week.
In December, Dong-joo, Shin's elder son who ran its Japan
operations, was removed from his posts, the Seoul-based Lotte
Group said. A few months later, Shin's younger son, Dong-bin,
who runs the much larger South Korean operations, was promoted
to co-CEO of Lotte Holdings, the group's Tokyo-based holding
company, Lotte Group said.
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At the time, analysts and the media said Dong-bin's promotion was a
sign that he would succeed his father. But on July 27, the patriarch
flew to Tokyo with elder son Dong-joo, and fired his younger son and
five other board members, Lotte Group said. A Lotte Holdings
spokeswoman declined to comment on any aspect of the dispute.
Days later, Dong-bin's Seoul-based Lotte Group issued a statement
questioning the independence of the patriarch's actions. "Former
vice chairman Shin Dong-joo and some family members arbitrarily took
the general chairman, who is aged and has difficulty in movement and
judgement, and induced a verbal dismissal announcement," the
statement said.
Since then, both sons and their supporters have continued to
challenge each other's claims to the empire.
The succession spectacle has fueled the resentment of many Koreans
over the grip the chaebol hold over the economy. Some have also
criticized Lotte's ties to Japan, Korea's former colonial ruler.
The office of Lotte founder Shin did not respond to requests for
comment for this story. Shin Dong-joo could not be reached for
comment while a spokeswoman for Lotte Group declined to comment on
Dong-bin's behalf.
(Additional reporting by Se Young Lee in SEOUL and Tom Wilson in
TOKYO; Editing by Tony Munroe and Miral Fahmy)
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