Lotte Group chairman Shin Dong-bin has sued the management of Kojyunsya, the de facto holding company of the 90 trillion won-business empire ($8.1 billion), in a suit that may end up ousting the company president, his older brother Shin Dong-joo, indefinitely.

According to Lotte officials, Dong-bin in January filed a suit against the shareholders and management of Kojyunsya demanding a nullification of the company’s October 2015 decision to dismiss him from his position as a registered director and appoint Dong-joo as the president.

Kojyunsya owns 28.1 percent of Lotte Holdings in Japan, which owns 99 percent of Hotel Lotte in Korea -- the de facto holding company of Lotte Group in Korea, which has businesses throughout South Korea, across Asia and in the U.S. 

Dong-bin believes that his brother had masterminded the shareholders’ decision to dismiss him. Kojyunsya also approved the Shin brothers’ father Shin Kyuk-ho to sell one share of the company to Dong-joo, making him the largest shareholder of the company, and thus the president.

Dong-bin claimed that his senile father was unwell, unable to think properly, and therefore the old man’s sale of a company share to the eldest son should be nullified.

In Korea, a separate trial is being held over the 95-year-old Lotte general chairman’s mental status.

Kyuk-ho in February was ordered to receive an “intense” 2-week assessment of his cognitive health, after judges concluded that without severely testing the old man, they cannot discern whether his decision to dethrone his younger son Dong-bin is legitimate.

The senior Shin reportedly wrote a letter in July 2015 firing Dong-bin from all managerial positions, and appointing Dong-joo to lead both the Lotte operations in Korea and Japan.

This letter has been behind the long fraternal feud over the control of Lotte.

Although Dong-bin won approval from shareholders of Lotte in Korea as well as Lotte Holdings in Japan, Dong-joo has claimed legitimacy citing the company founder’s support. The letter is also believed to have persuaded major shareholders of Kojyunsya to take Dong-joo’s side.

If the court rules that Kyuk-ho is in need of medical or legal help, Dong-joo is likely to lose several suits he has filed against his younger brother and Lotte Korea management in order to win control of Lotte, because the patriarch’s order will be regarded as void.

The ruling is likely to affect the Japanese court, too, and Dong-joo may lose his seat in Kojyunsya as well, industry watchers said.

On Sunday, shareholders of Lotte Holdings in Japan voted in support of Dong-bin at the general meeting held upon request from Dong-joo.

The results of the slew of lawsuits is expected to consolidate Dong-bin’s control over Lotte once again. “Expelling Dong-joo from Kojyunsya will end the succession war at last,” a Lotte insider said.

In July, Dong-joo and Kyuk-ho were stripped of their power inside the company after unsuccessfully attempting to oust Dong-bin from the management.

Late Monday afternoon, in what seems to be the first retaliation against the “rebel,” Lotte Confectionary, one of the main pillars of Lotte Group Korea, announced that it will cease the contract with Lotte founder Kyuk-ho as the company’s registered director. The issue will be put to vote at the shareholders meeting later this month.

Shin’s age was cited as the reason for the severed relationship.

Hwang Kak-kyu, known as Dong-bin’s right-hand man, will replace the senior Shin, the company official said.

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