Lotte Group founder Shin Kyuk-ho on Tuesday was replaced from the board room of the retail giant’s hotel unit, putting an end to his 43-year-grip amid an ugly succession battle between his two sons.

Shareholders in Hotel Lotte, the de facto holding company of Lotte Group Korea, approved a motion that requested to reappoint registered board members at a general assembly held in Seoul. 

The list, however, did not include the Lotte founder’s name, which automatically and officially removes him from the boardroom he has led since 1973.


Shin‘s retreat came as Hotel Lotte prepares to go public on the nation’s main stock bourse in the coming months.

The decision also came just four days after he was sacked from Lotte Confectionery, a matrix of Lotte Group Korea and the first business entity he established here after his success in postwar Japan.

At a separate shareholders meeting on Friday, the 94-year-old founder was replaced by Hwang Kak-kyu, a close aide to Lotte chairman Shin Dong-bin, his younger son.

Lotte’s other affiliates are widely expected to follow the suit.

Until last week, Shin Kyuk-ho was a registered board member for seven Lotte affiliates, including its TV home shopping and construction businesses as well as Lotte Giants, a professional baseball team based in Busan. 

Starting with Lotte Confectionery last Friday, Shin will be pushed to leave the boardrooms of the rest of the affiliates by August next year.

Shin’s forced, disgraceful departure is in line with a lengthy succession battle between his two sons that flared up in July last year.

The founder’s eldest son Shin Dong-joo claimed he was the legitimate successor named by his father. 

The fraternal war is nearing an end, however, as Shin Dong-bin won shareholders’ support to tighten his grip on Lotte’s businesses both in Korea and Japan.

Currently, Shin Dong-joo has no foothold in Lotte Group Korea or Japan, apart from the shares he still holds.

Pushing his father from the board will consolidate Shin Dong-bin‘s position as the successor, according to sources. 

Resisting his elder brother’s claim, Shin Dong-bin has argued that his aging father is unable to make reasonable judgment due to his deteriorating mental condition. 

A Seoul family court is reviewing a request to pick a legal guardian for the founder. 

The court’s decision, based on a medical judgement by doctors, is expected to play a crucial role in wiping out both his father’s legacy and influence within the group.

The Lotte chairman was never named as an heir to his father’s businesses. However, he has proven his leadership and talents in the operations of Lotte Korea, which he has led since the 1990s, said Lotte officials in Seoul. 

The size of Lotte’s businesses in Korea and Japan were similar before, but these days Lotte Korea is roughly 20 times bigger than Lotte Japan, based on revenue generated in fiscal year 2014.

Meanwhile, Shin Young-ja, the founder’s daughter, appears to be siding with Shin Dong-bin, they added.

The chairwoman of Lotte Samdong Welfare Foundation attended a concert and sat close to the Lotte chairman last week. 

Shin Young-ja attending the concert was seen as her way of endorsing her brother Dong-bin over Dong-joo -- a change in her stance in the fraternal war, they said, citing that she seemed to be standing by Dong-joo, pushing her father’s wheelchair with him in July.

By Cho Chung-un (christory@heraldcorp.com)