[Yonhap News Photo]
A protracted fraternal feud over control of Lotte, South Korea's fifth largest family-run conglomerate, took a new turn this week as its ailing founder walked out of a hospital after rejecting a psychiatric test.
Shin Kyuk-ho, 94, was admitted to the Seoul National University hospital Monday for psychiatric tests following a suit filed by his younger sister who said her brother needed a legal guardian because of his deteriorating mental state. The proposed test was part a protracted battle involving Shin's two sons for managerial control of the retail and hotel giant.
The Lotte patriarch, however, got out of the hospital Thursday out of his own will after refusing to undergo a psychiatric test, said SDJ Corporation led by his first son, Shin Dong-joo, who has been ousted by his younger brother, Shin Dong-bin.
The founder's move coincided with Hotel Lotte's announcement that it would go public on June 29 in a major initial public offering aimed at expanding the hotel chain's duty-free and other businesses. From June, Hotel Lotte plans to hold roadshows in New York, London, Singapore and Hong Kong.
The feud began in late 2014 when Dong-joo who had run group operations in Japan was removed from his post, and Dong-bin, who runs South Korean operations, seized control of Lotte Holdings, the group's Tokyo-based holding company, in a bid to succeed his father.
In July last year, the ailing father fired his younger son. Dong-bin fought back by sacking his father, insisting his father cannot name an heir because he has been mentally incompetent with age. Since then, the two sons have continued to challenge each other's claims to the empire.
The father who founded the group as an ethnic Korean living in Japan has been in his dotage without making a clear decision on his successor. His younger son now holds the support of South Korean and Japanese shareholders, but his brother has described himself as the legitimate successor of his father.
Under the virtual command of Dong-bin, Lotte Shopping, the group's key unit, posted a 22 percent on-year drop in its first-quarter operating profit due to weaker operating performance in its hypermarket and home shopping businesses. If the patriarch is found to have a mental problem, Dong-bin will consolidate his control over the sprawling business group.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
