SEOUL (Reuters) - Shin Dong-joo, the elder son of Lotte Group’s founder, has decided to sell most of his stakes in Lotte Shopping 023530.KS and three other units of South Korea’s No.5 conglomerate, his company said without providing the value of the sale.
Shin raised “serious concerns” about the planned merger of Lotte Shopping with the three other affiliates - Lotte Confectionery 004990.KS, Lotte Chilsung Beverage 005300.KS and Lotte Food 002270.KS.
Shareholders at Lotte Group affiliates last month approved a plan to set up the holding company by restructuring the conglomerate’s four listed units to boost operational transparency, a move analysts say could further enhance its chairman’s control amid a power struggle with his brother.
The conglomerate has been under pressure to resolve its complex structure and improve governance after a public feud between founding family members that began in 2015 and has pitted Lotte Group Chairman Shin Dong-bin against elder brother Shin Dong-joo.
“The splits and mergers aimed at launching a Lotte holding company would not benefit individual shareholders,” Shin Dong-joo’s statement said.
The elder Shin said his stake sales did not mean he would give up trying to gain management control of the group.
Shin Dong-bin, the youngest son of Lotte Group founder Shin Kyuk-ho, cemented control of the group in 2015 with the support of shareholders in a Japan-based holding company. Older brother Shin is engaged in legal proceedings seeking to wrest control.
Several Lotte Group shares barely moved after Shin’s decision to sell his stakes.
The elder Shin also said Lotte Shopping should “immediately” withdraw from the Chinese market, after most of its stores were shut down in the wake of a diplomatic row between Beijing and Seoul.
Reporting by Hyunjoo Jin; Additional reporting by Joyce Lee and Dahee Kim; Editing by Stephen Coates