April 27, 2024
Retail & Consumer
Jailed Lotte chief fends off elder brother’s leadership challenge
[THE INVESTOR] The jailed head of Korean conglomerate Lotte won the support of Japanese shareholders in a vote on June 29 to keep his seat in the boardroom of a crucial affiliate in the group’s governance structure, cementing his grip on the retail giant from behind bars.
Lotte Holdings, holding firm for Lotte’s Japanese affiliates which also has major stakes in the group‘s Korean units, disapproved the motion to dismiss Shin Dong-bin as a board member during its regular shareholders’ meeting at its headquarters in Tokyo.
The motion to dismiss Shin was brought up by Shin Dong-joo, former vice chairman of Lotte Holdings and estranged elder brother of Dong-bin, who has waged an unsuccessful battle against his sibling to gain control of Korea’s fifth-largest conglomerate.
Chairman Shin prevailed in all the four previous votes that have taken place since the managerial feud between the two brothers surfaced in 2015.
The elder Shin was dismissed from his position in Lotte Holdings in 2015 due to a compliance violation and poor management acumen, according to Lotte Group.
During the meeting, Dong-joo also proposed his designation as a board member but again failed to gain approval from shareholders.
The latest motion was proposed after Shin Dong-bin was sentenced to 2 1/2 years in prison in February for giving bribes to a friend of ousted ex-President Park Geun-hye in return for business favors. He resigned as co-CEO of Lotte Holdings following the ruling but retained his status as a director of the board.
The chairman has sought bail to speak directly at the shareholders‘ meeting but was thwarted as the court did not deliver its decision on the request. It was the first time since the establishment of Lotte Holdings in 2007 that he had missed the regular gathering.
A delegation of senior Lotte Group executives headed to Japan on Thursday to meet with the management of the conglomerate’s Japanese counterpart, carrying a letter from the chairman.
By Song Seung-hyun and newswires (ssh@heraldcorp.com)
