The founder of South Korean retail giant Lotte Group is expected to lose his seat in the boardroom of a crucial affiliate in the conglomerate's governance structure, media reports said Thursday.
The board of directors of Tokyo-based Lotte Holdings Co. is known to have decided not to propose the extension of Shin Kyuk-ho's tenure as a board member for their meeting later this week, according to local media reports.
In this file photo taken March 20, 2017, Shin Kyuk-ho, founder of South Korea's fifth-largest business group Lotte, arrives at a court in a wheelchair for questioning in Seoul. The trial began on the day for Shin and his family members who are accused of embezzlement and breach of trust. The conglomerate is also implicated in a graft scandal, suspected of giving bribes to former President Park Geun-hye's close friend for business favors. (Yonhap)
The company is at the top of Lotte's Japanese affiliates via a cobweb-like ownership structure and holds 19 percent stake in Hotel Lotte Co., a de facto holding firm of the group's Korean units.
If the board decides not to extend Shin's term, the 94-year-old will likely be removed from his post following the shareholders meeting slated for later this month.
Earlier this month, the country's top court confirmed the designation of a nonprofit subsidiary of a law firm as the guardian of Shin, efficiently backing his second son and group Chairman Shin Dong-bin's argument that his father lacks the mental capacity to make meaningful decisions.
The petition seeking guardianship over Shin was filed in December 2015 by the group founder's younger sister amid a bitter feud between his two sons over the managerial control of the group.
While the elder son, Shin Dong-joo, claimed that the founder handpicked him as the successor for the retail group, Dong-bin insisted that his father was unable to make reasonable judgments due to mental health problems.
The family feud virtually came to an end after the incumbent chairman won shareholder support in March last year to tighten his grip on the group.
While Chairman Shin was caught up in the leadership battle, his whole family, including the founder, was put on trial on multiple corporate crime allegations. The conglomerate is also implicated in a graft scandal involving former President Park Geun-hye and her friend.
The 94-year-old Shin has lost his board seats at Lotte's key affiliates as his tenure ended. The only company where he works as director now is Lotte Aluminium, but the tenure is also slated to end in August unless it is extended.
"We do have a shareholders meeting scheduled, but the results can be confirmed only after all the procedures are completed," a Lotte official said. (Yonhap)