Bid to remove Dong-bin from Lotte Holdings fails
Shareholders of Lotte Holdings, a de facto holding company of Japan’s Lotte business, on Sunday voted in favor of Lotte Group Chairman Shin Dong-bin, further solidifying his control over the confectionery giant in the eight-month inheritance battle with his older brother.An extraordinary shareholders’ meeting was held in Tokyo to vote on whether to remove Chairman Shin as a board member. The move was proposed by his older brother Dong-joo in a bid to prove that his management rights to the company, where he served as vice chairman until January last year, are still valid.
Lotte Holdings is key to controlling Lotte Group because of its various stakes in group affiliates that total around 80.
The troubled older brother organized the meeting through Lotte Holdings’ top shareholder Koiyunsya, widely known in Korea as Gwangyunsa. He proposed shareholders vote on four issues, including that he be re-appointed as a board member. Both siblings attended the meeting that lasted for half an hour on Sunday.
The elder Shin’s defeat came after he made an exceptional offer last month to give out 2.7 billion won ($2.2 million) worth of shares to members of the association of the Lotte Holdings workers - the second-largest shareholder after Koiyunsya, with a 27.8 percent stake - should he win the vote. The association consists of 130 workers who have worked for Japan’s Lotte operations for more than 10 years.
The majority of the participants in the meeting voted against all of the four issues, said Lotte Holdings in a release after the meeting.
“We have reconfirmed shareholders’ firm support for Chairman Shin Dong-bin,” said Lotte Group in a statement. “Former Vice Chairman [of Lotte Holdings] Shin Dong-joo is urged to sternly accept the result of the shareholders’ meeting and to halt an act of hurting Lotte’s corporate value and undermining corporate activities.”
Regardless, the older brother - who continues to pursue what he believes is his right to take over the conglomerate from his 93-year-old father and Lotte Founder Shin Kyuk-ho - vowed to put the same proposal before the regular shareholders’ meeting scheduled in June.
Dong-joo said in a statement, “The head of the employees’ association did not even attend the shareholders’ meeting and exercised his voting right through the power of attorney, from which I believe the opinion of the association members was not properly reflected.”
He also raised suspicion that Lotte Holdings’ top managers imposed unfair pressure on association members.
The wrangling between the two brothers over the top confectionery maker began last July as Dong-joo attempted to have his younger brother sacked and to challenge the leadership through patriarch Kyuk-ho.
Court hearings are underway to determine the mental state of the 93-year-old and the older son has made desperate claims through a series of videos that the founder is mentally sound.
BY SEO JI-EUN [seo.jieun@joongang.co.kr]
with the Korea JoongAng Daily
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