Published : Aug. 5, 2015 - 17:23
Lotte founder Shin Kyuk-ho (Yonhap)
Controversy over the decision-making abilities of Lotte Group founder and general chairman Shin Kyuk-ho is escalating after a Japanese Lotte CEO raised concerns about the current health of the 93-year-old tycoon.
“The former chairman and I met up on July 27, and at first, he was calm and did not show any signs of problems. But there were moments during the middle of our conversation when I felt a bit alarmed,” Takayuki Tsukuda, CEO of Lotte Holdings, the de facto holding company of Lotte Group, told Korean reporters at a press briefing in Tokyo on Tuesday.
“He would repeatedly ask the same questions, restate what I said previously or think that I was in charge of Lotte’s Korean operations, though I head the Japanese side,” Tsukuda said, lending weight to suspicions regarding the aging chief’s mental health.
During a brief encounter with his younger son and group chairman Shin Dong-bin in Seoul’s Lotte Hotel on Monday, the elder Shin had reportedly displayed similarly erratic behavior, asking his son, who had been staying in Tokyo since sacking his father from his post as chairman, “where he had been.”
The founder seemed to have drastically changed his behavior from just the day before, when he chastised Dong-bin via a publicly released video, asserting that he “cannot forgive his younger son for what he did.”
On July 27, the eldest son and ousted Lotte Japan leader Shin Dong-joo tried to sack his younger brother from the board of Lotte Holdings at the behest of his father. Dong-bin, who has operational control over both Lotte Korea and Japan, struck back the next day by dismissing his father from his post as chairman of the holding company.
Dong-joo on Sunday released a video of his father strongly criticizing Dong-bin, which further fueled speculations about the aging former chairman’s mental health.
The video shows the senior Shin slowly reading his message -- a prewritten note -- speaking at times in inaudible and broken speech, even confusing Lotte Holdings Japan with its Korean counterpart at one point.
If it is confirmed that the aging Lotte chief is truly in a state where he is unable to make sound managerial decisions, industry watchers say that Dong-joo’s standing in the Lotte power struggle could significantly weaken, as it would deal a blow to the legitimacy of his father’s recent orders as well as drive away his key allies.
“That general chairman Shin Kyuk-ho fired six board members including myself at once is unthinkable,” Tsukuda said, adding that the Lotte Holdings board asked the founder Shin to step down because it “did not want him to make difficult decisions at such an old age.”
“Out of respect for everything he has achieved for the conglomerate, we had made the difficult decision to name him as honorary chairman,” he said.
By Sohn Ji-young (
jys@heraldcorp.com)