Battle of Brothers: The Shins Fight for Control of Lotte

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The power struggle over control of Lotte Group between brothers Shin Dong-joo (61) and Shin Dong-bin (59), sons of Lotte founder Shin Kyuk-ho (93), has taken center stage in Korean media. After Shin Dong-ju was dismissed from Lotte Holdings in Japan (assumed to be due to his poor management performance), younger son Shin Dong-bin was promoted to chairman of the holding firm this month. Lotte Holdings is the de facto manager of Lotte Group that General Chairman Shin Kyuk-ho still takes considerable part in. He holds a 28% stake in the entire holdings while his two sons hold 20% each. This week, things have taken a sharp turn, with Shin Dong-joo unveiling a written statement signed by his father that dismisses his younger brother from Lotte Holdings and yielding management rights to Shin Dong-joo. However, Seoul-based Lotte Group (run by Shin Dong-bin) refuted the legitimacy of the letter of attorney by claiming deterioration of Shin Kyuk-ho’s mental health and the fact that this letter was obtained without consulting the board of directors. On Tuesday, the board held an urgent meeting; chairman Shin Dong-bin, who was on a business trip to Japan, is expected to return to Korea early next week. While it is not yet clear whether Shin Dong-bin will maintain the control of Lotte Holdings, Seoul-based Lotte Group has announced that the matter will be confirmed in an upcoming shareholders’ meeting.

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