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Lotte probe again ignites management succession feud

All News 09:49 June 11, 2016

SEOUL, June 11 (Yonhap) -- The succession feud in the fifth-largest South Korean family-controlled conglomerate Lotte Group, which seemed to end with the victory of the younger brother, is seeing a second round with the latest prosecutors' investigation, industry watchers said Saturday.

The outlook came as prosecutors raided the headquarters of the South Korean retail giant, as well as its six affiliates, on Friday, over allegations of embezzlement and malpractice. The move reflects poorly on Shin Dong-bin, who currently leads Lotte.

Lotte has been immersed in a family feud between the founder's two sons, Dong-joo and Dong-bin, who each claim to be the heir of the conglomerate.

While the elder son, Dong-joo, claimed the Lotte Group founder hand picked him as successor, Dong-bin insisted that his father was unable to make reasonable judgments due to mental health problems. The prolonged family feud virtually came to an end after the founder's second son and incumbent chief won shareholder support in March to tighten his grip on the group.

Industry watchers, however, say the latest probe will hurt the credibility of Dong-bin as the leader, and the elder son may bring up the issue at the shareholders' meeting of Tokyo-based Lotte Holdings, which controls the group both in South Korea and Japan.

Dong-joo is currently in South Korea taking care of his 93-year-old father, Shin Kyuk-ho, who has been hospitalized.

Others, however, said the issue is insufficient for Dong-joo to take the throne from his younger brother, as the family-wide investigation may also have an impact on him as well.

colin@yna.co.kr
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