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Lotte founder's first son wants compromise in sibling rivalry

All Headlines 15:06 October 21, 2015

SEOUL, Oct. 21 (Yonhap) -- Shin Dong-joo, the Lotte Group founder's oldest son, said Wednesday that he wants things to return to how they were before the sibling squabble erupted over control of the conglomerate, proposing a compromise with his younger brother to end the nasty power struggle.

Lotte, the country's fifth-largest conglomerate, is mired in a leadership dispute between group founder Shin Kyuk-ho's two sons -- Dong-joo and Dong-bin -- who had each controlled the company's operations in Japan and Korea until early this year.

While Dong-joo was ousted from key positions at Japanese units, Dong-bin took the helm of Tokyo-based Lotte Holdings, the group's holding firm, after winning support from Japanese shareholders in August.

But that wasn't the end of the story.

Early this month, Dongjoo filed lawsuits against his brother and key Lotte affiliates to win back management of the group.

In an aggressive media campaign, Shin Dong-ju said his father, who he believes is supported by shareholders of Lotte Holdings, should run the business in Korea and Japan like before and decide who will succeed his post.

"I think my current issue is my father should come back to represent the company and (become) chairman of Korea Lotte and Japan Lotte. He will decide who will be the successor," Shin said in English during an interview with Yonhap News Agency. "If he (Shin Kyuk-ho) thinks my performance is good, he will appoint me as successor."

He said Shin Dong-bin's performance is "not excellent," citing losses in the Chinese business. He did not provide further details.

"I want to compromise with him (Shin Dong-bin) because he's my brother, but he doesn't want to compromise," Shin said, adding that all three want to settle the situation.

The latest infighting on the public stage is another blow to Lotte's image at a critical time when the retail giant is trying to keep the operating licenses of two duty-free stores in Seoul, which are set to expire in December.

Lotte Duty Free, the nation's No. 1 operator, has comfortably led the nation's duty-free market since opening its first store 35 years ago, but it faces a crucial test this time under a new law that requires existing operators to compete with others to renew their licenses.

While the stakes are high for Lotte, the upcoming bid is a major opportunity for local retailers in search of a new growth engine amid the stubbornly sluggish domestic demand.

During last month's parliamentary audit, opposition lawmakers grilled Lotte chairman Shin Dong-bin over its opaque corporate governance, overwhelming 65 percent share in the duty-free market and other business issues.

ejkim@yna.co.kr
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