SEOUL, March 7 (Yonhap) -- Shin Kyuk-ho, the 94-year-old Lotte Group founder, is expected to lose all of his board seats at the conglomerate's major affiliates in the coming year as he is no longer capable of conducting normal business activities, company officials said Monday.
The business mogul has stood in an unwelcome spotlight as he has sided with Dong-joo, his eldest son and former vice president of Tokyo-based Lotte Holdings, in a succession feud with his younger brother and Lotte chairman, Dong-bin.
Shin appointed his second son as the chief of Lotte Group, South Korea's fifth-largest conglomerate, in 2011, but has served as board of directors at several affiliates, including Lotte Confectionery, Hotel Lotte and Lotte Shopping.
After shareholders of Lotte Holdings supported the incumbent chief in Sunday's vote, Lotte Confectionery was quick to announce its plan to unseat the founder from the board when his term expires later this month, citing his health problems.
"The company will not reappoint Shin Kyuk-ho to the board as he is deemed not fit for everyday management activities due to his old age," a Lotte Confectionery official said.
The decision is subject to an approval at the shareholders' meeting slated for March 25. Hwang Kak-kyu, Lotte chairman Shin Dong-bin's right-hand man, will take up his post.
With a legal suit related to his legal guardian currently pending in local court, Shin will not be able to keep his board seats when his current terms expire one after another through next year, according to company officials.
In late 2015, the founder's younger sister requested a Seoul court to pick her as his legal guardian, claiming her aging brother is no longer capable of making consistent decisions.
Shin started a small confectionery business in postwar Japan in 1948 and later developed that business in South Korea, making it into a sprawling business empire that owns 74 affiliates in 20 countries with an annual revenue reaching more than 80 trillion won (US$68.6 billion) as of 2014.
But he has come under criticism for holding the grip for too long, leaving his two sons fighting each other to take control of the vast business empire whose operations range from South Korea to Japan.
On Monday, Lotte Confectionery also announced a plan to conduct a 10-for-1 stock split to make the nation's most expensive share easier to trade among retail investors.
The board of directors decided to cut the face value of its common stock from 5,000 won to 500 won, which would increase its number by tenfold to 14.21 million.
The proposal is also subject to approval by shareholders on March 25, the company said in a regulatory filing.
Trading of its shares will be suspended from April 27 and May 16.
Its shares closed at 2.4 million won in the main KOSPI market on Monday, up 1.93 percent from the previous session.
The leading snack maker stands at a critical position in the group's cobweb-like structure, having Tokyo-based Lotte Holdings as the second largest stakeholder with a 9.9 percent stake.
The shareholder-friendly decision also comes at a time when Lotte Group is seeking to list Hotel Lotte on the Seoul bourse in the coming months to improve its corporate governance.
The initial public offering of Hotel Lotte is one of the reform pledges the chairman has made to assuage public disgust after the bitter family feud shed light on its complicated shareholding structure.
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