Lotte chief rules out Korea-Japan split

Lotte Group chairman Shin Dong-bin on Tuesday ruled out separating the retail giant’s operations in Korea and Japan.

“Lotte in Korea and Japan have been partnering in overseas markets including Southeast Asia. The combined sales of the two companies amount to 5 trillion won ($4.25 billion), ranking seventh to eighth in the global confectionary market,” Shin said at a news conference held to apologize for a high-profile family feud that erupted last month.

“When seen separately, the two post only 2.5 trillion won in sales each, ranking around 30th in the global market. Therefore, separating the Korean and Japanese management is not an option and neither is it beneficial for the national economy,” he explained.

There was speculation earlier that the business empire may separate its Korean operations due to differences in the two countries’ corporate culture and the chairman’s escalating tension with his elder brother, Shin Dong-joo, who used to control the Japanese operations.

Lotte Group chairman Shin Dong-bin apologizes for a family succession battle at a news conference held in Seoul on Tuesday. Yonhap

The ugly succession battle between the two sons of the founder and general chairman Shin Kyuk-ho have spurred debate on the murky governance structure and Korea’s anti-Japanese sentiment.

The developments led to assumptions that it would be difficult for Dong-bin to mend ties with his brother and 93-year-old father, who was diagnosed with a condition that is known to impair memory and damage logical thinking.

As to his relationship with his father and brother, the chairman said he is “open to having talks on private matters, but discussing over management rights is a separate issue.”

“We currently have a payroll of about 130,000 people in Korean units, and 180,000 employees globally. We should separate the management and family problems for our business stability.”

By Suk Gee-hyun (monicasuk@heraldcorp.com)