Lotte's image tarnished severely

First son’s poor fluency in Korean has dealt a severe blow

By Park Si-soo

The brewing feud between the two sons of the Lotte Group founder has significantly tarnished the image of the nation’s fifth-biggest conglomerate.

Many people have raised eyebrows at smear campaigns that family members have directed at each other.

The infighting has also laid bare Lotte’s outdated, opaque management practices and bizarre governing structure as well as untold stories of the founder’s private life, his wives and children that further hurt the company’s hard-won “decent” image.

The first son’s poor communication skill in Korean has also dealt a severe blow, raising questions about Lotte’s identity.

“I was really disappointed at Lotte and its owner family members,” a citizen wrote on a website. “It’s the fifth-biggest company here. But its management system is fifth from the bottom.”

Another netizen expressed deep frustration over the first son’s poor fluency in Korean. “Is Shin Dong-joo Japanese?” the netizen said. “It doesn’t make sense that a person who looks to take control of one of Korea’s biggest business empires is poor in speaking Korean.”

Dong-joo, whose nationality is Korean, spoke fluently in Japanese during TV interviews last week, but his Korean was at a beginner’s level.

For Korea, Japan is a close ally and a major trade partner. Nonetheless, Koreans’ animosity against Japan is still high because of atrocities committed against Korean during World War II ― one of which was the so-called comfort women issue ― and the absence of sincere remorse and an apology by Japan’s top politicians, especially Prime Minister Shinzo Abe.

Since the Lotte conflict became public last week, Shin Dong-joo and Dong-bin have hurled accusations at each other ― in the form of memos, recorded voice and video clips ― through media outlets as the two jockey to be successor of the retail-focused conglomerate in Korea and Japan.

Observers said the events might have been helpful in consolidating internal support ahead of a shareholders’ meeting of Lotte Holdings in Japan, a de facto holding company that governs the entire group through a web of cross-shareholdings. But the whole affair had resulted in Lotte’s image being tarnished severely, they said.

Dong-joo, the first son, tried to justify his succession with a hand-written memo by his father, 93, and Lotte founder Shin Kyuk-ho. But it has only revealed the group’s outdated appointment system that is believed to have existed during the kingdom era.

The first son also claimed his younger brother Dong-bin, who is Lotte Group chairman, was “beaten” by his father in early July for losses incurred by Lotte’s unprofitable businesses in China and Hong Kong, another pre-modern, authoritarian management practice.

Dong-joo’s poor communication in Korea was another blow to Lotte’s image. Yet a bigger blow stemmed from allegations that the father of the Lotte founder’s second wife, Hatsuko Shigemitsu, was a Class-A war criminal who is enshrined at the controversial Yasukuni Shrine in Tokyo. Lotte vehemently denied the allegations, but without concrete evidence.

“Lotte has already found its corporate image damaged severely,” an industry insider said. “The ongoing conflict should be resolved as early as possible, otherwise it will drag the company into deeper into trouble.”