SDJ Corp. chairman Shin Dong-joo, who has been fighting a legal battle against his younger brother, Lotte Group chairman Shin Dong-bin, over the control of Korea’s fifth largest business group, has virtually surrendered to the latter.
He said he would not submit a proposal for dismissal of Shin Dong-bin from the board of Lotte Holdings in Japan at the company’s regular general meeting to be held on June 26.
The elder Shin pushed for dismissal of his younger brother at the past five general shareholders’ meetings. His latest decision suggests that he has raised a white flag in his battle against the younger brother. The Lotte chairman has not made any comment on this.
While refraining from seeking the dismissal of his younger brother, the SDJ chairman submitted a proposal for the appointment of himself as a director.
He said, “I will be waiting for a reply from Shin Dong-bin to my proposal for reconciliation until the shareholders’ general meeting.”
The elder Shin was removed from Lotte Holdings’ board in 2015 for violation of compliance. He made every effort to return to the management since then but failed to do so.
In particular, he tried to remove his younger brother from the board and put himself on it at the past five general shareholders’ meetings but all his attempts failed, and he was practically ousted from Lotte Group. He has recently made a conciliatory gesture by sending a letter to his younger brother, proposing a family meeting and filing a petition.
However, people inside and outside Lotte Group questioned his sincerity. They note that he is still in a legal battle with his younger brother and is trying to drum up sympathy by officially announcing his reconciliation attempts.
Some say that what the elder Shin is seeking is to regain a seat on the board rather than make peace with his younger brother.
The major shareholders of Japan’s Lotte Holdings include Kojunsha Corp. with a 28.2 percent stake, an employee stock ownership association with 27.8 percent, affiliated firms with 13.9 percent and executive stock ownership association with 6 percent. Shin Dong-joo is the largest shareholder of Kojunsha Corp. with a 50 percent stake plus one share. He needs support from an additional 22 percent of shareholders to return to the board.
Lotte Group faced uncertainly due to the proxy war at the past five shareholders’ general meetings. Notably, tensions heightened last year to such an extent that the younger Shin who was imprisoned at that time applied for bail before the regular general meeting. In short, Shin Dong-bin will have a peaceful general shareholders’ meeting for the first time in four years.