Lotte Korea chief set to fight back

By Kang Seung-woo

Lotte Korea Chairman Shin Dong-bin

Lotte Korea Chairman Shin Dong-bin, the younger son of group founder Shin Kyuk-ho, plans to return home today, said officials of the group Sunday.

He has been staying in Japan gathering support for a vote at the shareholders’ meeting. A showdown over leadership of the conglomerate is expected to early this month and will determine the winner of a sibling feud between Dong-bin and his elder brother, Dong-ju, over who will take management control of the group.

Dong-bin is expected to make a public apology for causing concern.

“Chairman Shin will return home Aug. 3 after wrapping up his schedule in Japan. He will make a public apology for causing concern over family problems,” a group official said.

Dong-bin has been on the defense recently because his father, 93, is said to support Dong-ju and plans to pass group control to the eldest son. Dong-ju and other family members released a document on Friday showing the founder’s support for Dong-ju as successor over Dong-bin.

Dong-bin has reportedly lost his father’s confidence after the group lost more than 1 trillion won ($853 million) from its operations in China and Hong Kong.

In the meantime, the deepening succession row may negatively affect President Park Geun-hye’s plan to grant special pardons to convicted tycoons.

Last month, President Park pledged to grant special pardons on Liberation Day, Aug. 15, raising speculation that she may pardon jailed business leaders.

The Lotte dispute will also likely damage President Park’s push for labor market reform.

The main opposition New Politics Alliance for Democracy (NPAD) has joined the Lotte bashing, calling for the government to reform the ownership hierarchy of chaebol families as well as the labor market.

“The government and the ruling party have forced the labor circle to sacrifice itself, stressing that a pro-conglomerate economic policy will lead to the recovery of the nation’s sluggish economy,” said Rep. Jun Byung-hun of the NPAD on Friday.

“For the national economy to grow, labor market reform is important, but reform of conglomerates is as important, as evidenced by the Lotte Group’s family feud.”

However, the Saenuri Party has yet to officially respond to the conflict.

President Park and the ruling side have called for labor market reform to create more jobs for young people and to revive the sluggish economy.

As part of the reform plan, the government is pushing for a peak wage system that offers job security guarantee, but gradually cuts salaries of older employees after they reach a certain age.

However, the opposition party and labor unions oppose the reforms, denouncing it as government oppression of workers’ rights.