Lotte succession almost done, but not over yet
Shin Kyuk-ho
Succession competition will continue until Shin Kyuk-ho officially retires
By Park Si-soo
Shin Dong-bin appears to have consolidated his position as the crown prince of retail giant Lotte Group.
With the group’s Korean business under his belt, the 60-year-old was named on Thursday as CEO of Lotte Holdings, a holding company of the group’s affiliates in Japan.
“I will fulfill my duty and responsibility as leader and the make best efforts for Lotte’s businesses in Korea and Japan, in accordance with the philosophy of Shin Kyuk-ho,” Shin said after the designation.
This event reaffirmed his victory in the two-way race with his elder brother, Dong-joo, for the throne of the 92 trillion won ($90 billion) empire.
The elder brother was ousted from his seats at Lotte Holdings and other Japanese units in January by his father and Lotte founder Shin Kyuk-ho, 93.
But experts said the game is not over because the designation does not mean that the younger brother has inched closer to the group’s ownership. Still, the father holds a controlling stake in Kwang Yoon Sa that governs the entire group through a complicated web of cross-shareholdings.
In addition, the brothers’ stake in the group’s key units, including Lotte Holdings and Lotte Shopping, is almost the same. Given this, analysts do not rule out the possibility that the conflict between two scions will be reignited at any time.
Their father appeared to have thrown his weight behind the second son, but things are subject to change, they said.
“It seems obvious that Dong-bin maintains the upper hand in the race with his elder brother,” an industry insider said. “I believe the race wrapped up favorable to him. The game was virtually over.”
But another insider did not agree, saying the competition will continue until the founder retires.
“Until Shin Kyuk-ho officially retires and the new leader inherits his company stakes, the succession competition will continue,” he said. “Shin Dong-joo still has considerable shares in both the Japanese and Korean businesses, which will make it hard to predict the future. Therefore, Dong-bin will be pressured to show some progress to impress his father.”
Lotte was established in Japan in 1948. Its Korean unit started as an affiliate of Lotte Japan in 1967 and has grown into an even bigger business conglomerate here after seeing success in retail, hotel and petrochemical industries, among others, while the Japanese unit focused on the snack-making business.
Lotte Korea reported 83 trillion won in sales for 2013, with its Japanese sister achieving less than 6 trillion won.
The group has recently started operating the gigantic Lotte World Mall in southern Seoul, added duty-free shops to its lucrative overseas business portfolio and unveiled plans to open multiple shopping malls in Southeast Asia, including Vietnam and Indonesia.