Lotte Group founder and general chairman Shin Kyuk-ho on Tuesday was sacked from the post of CEO of Lotte Holdings in Japan by his heir and second son Shin Dong-bin.

The junior Shin, chairman of Lotte Group in Korea, called an emergency meeting of the board of directors of the holding company in Tokyo and dismissed his father from the top post.

Lotte Group said in a statement that the senior Shin will be positioned as an honorary chairman instead of general chairman. Executives will still report to him on business affairs, but he will be virtually powerless in all operations, insiders said.

The reason behind the 93-year-old tycoon’s dismissal from the pinnacle of Lotte governance is as yet unknown.

But the unexpected move came one day after the senior Shin unilaterally fired six board members, including his son, after arriving in Tokyo early this week, according to reports.

The reports said the son launched a counterattack against his father while claiming that the en masse dismissal was illegal.

“Chairman Shin Dong-bin claimed that Monday’s decision was illegitimate because no board meeting was held to approve anything. He took a step further and dethroned his father,” a source said.

Dong-bin reportedly suspects his older brother Shin Dong-joo might have masterminded the scheme, pulling the strings of his aged father.

With the senior Shin stepping down, Dong-bin has become the apparent controller of the holding company, which virtually controls Lotte companies in Korea and Japan, observers say.

Lotte Holdings has 37 affiliates and they together reportedly own 99.28 percent stake in Hotel Lotte in Korea, which is the de facto holding company of Lotte Korea. Lotte Hotel owns 34.64 percent of Lotte International, 12.99 percent of Lotte Aluminum, 38.34 percent of Lotte Engineering and Construction, 31.07 percent of Lotte Corp. and much more, constituting the most complicated cyclical shareholding structure in the country.

Such a governance structure made the head of Lotte Holdings the owner of Lotte in both Japan and Korea, which was generating combined sales of 90 trillion won ($77 billion) as of 2013.

Dong-joo earlier this year was sacked from the presidency of Lotte Holdings. Dong-bin instead was appointed the president on July 16, hinting at a change in plans of power succession, from the eldest son to the second one. 

By Bae Ji-sook(baejisook@heraldcorp.com)