TOKYO (BLOOMBERG) - Lotte Holdings shareholders voted to leave Lotte Group Chairman Shin Dong Bin in his post of director of the holding company, Lotte Group said in a statement, rejecting a third bid by his brother to seize control of the family-run South Korean conglomerate amid a government probe into possible bribery and embezzlement.
Shareholders of the Lotte unit rejected former Lotte Holdings Vice Chairman Shin Dong Joo's proposal to oust seven current directors of the board including Shin Dong Bin and Lotte Holdings President Takayuki Tsukuda. Shin Dong Joo, 62, intended to form a new board including himself at the company meeting Saturday, a Lotte Group spokesman, who cannot be named because of company policy, said by phone.
The decision leaves his brother, Shin Dong Bin, 61, at the helm of a retail-to-plastics empire dogged by a government probe that has prompted it to postpone a US$4.5 billion (S$6.07 billion) initial public offering at its hotel unit, and to scrap a major acquisition by its chemicals arm.
Shin Dong Bin's victory in the Japan vote Saturday is key because of Lotte Holdings' shares in other affiliates in the group, which has 89 Korean units with more than 100 trillion won (S$114 billion) in assets.
Shin Dong Joo will keep fighting "to normalize" the business of Lotte Group and to seek to oust current directors of the board including Shin Dong Bin, SDJ Corporation, which represents the older brother, said Saturday in an e-mailed- statement.
Lotte's identity as a Korean company founded in Japan has also divided the family, with Shin Dong Joo insisting that it is the wish of his father, Shin Kyuk Ho, to consolidate control of the company within Korea. Shin Kyuk Ho, 93, founded Lotte in Japan in 1948 as a maker of chewing gum and sweets. Shin Dong Joo had previously been in charge of the Japanese side of the business, while Shin Dong Bin had control of the group in Korea. Dong Joo was ousted in January 2015, setting the stage for his attempts to mount a comeback he claims has their father's blessing.
Shin Dong Bin, who has an MBA from Columbia University in New York and a bachelor's from Tokyo's Aoyama Gakuin University, last week vowed to complete the IPO of its hotel unit this year. Shin Dong Joo, also an Aoyama Gakuin graduate, has an MBA from the Fu Foundation School of Engineering, and speaks Japanese better than the Korean language.
Shin Kyuk Ho in March lost his board seats at Hotel Lotte Co. and Lotte Confectionary Co. as attempts by Shin Dong Joo to push his younger brother out backfired. Lotte Group's businesses include the country's largest department store chain, luxury hotels and the Lotte World Adventure theme park.