Lotte founder steps down after 70 years of management

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Shin Kyuk-ho, the ailing founder of South Korea's Lotte Group, has lost his final seat on the company's board.

The board of directors of Lotte Aluminum Co., a packaging material firm, on Wednesday decided not to renew Shin's term, signaling the complete departure of the 94-year-old from the company he founded in 1966 as Dongbang Alumi Industry Co.

The Lotte affiliate's decision could be linked to the recent appointment of a legal guardian for Shin.

In June, the country's top court ruled that Shin has limited mental capacity to work due to illness and age, and designated a local law firm to act as his guardian, in favor of his second son and group chairman Shin Dong-bin.

Shin Dong-bin, chairman of Lotte Group, center, leaves the Seoul Central District Court for a lunch break in Seoul, South Korea, on Monday, March 27, 2017. /VCG Photo

Shin Dong-bin's younger sister filed the petition seeking guardianship over their father in December 2015, amid a feud between his two sons over the managerial control of the group.

Shin Dong-bin's older brother, Shin Dong-joo claimed that their father chose him as the successor for the retail group, while Shin Dong-bin said that their father was unable to make reasonable judgements due to mental 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.

The Lotte patriarch has been gradually retiring from the board of major affiliates in the last couple of years. Shin lost his board seat at Lotte Confectionary Co. and Hotel Lotte Co. last year. In June, he also left the board of Lotte Holdings Co., the Japanese holdings entity that controls the Lotte empire.

He will continue to serve as the group’s honorary chairman, a Lotte official said.

Shin founded Lotte in Japan as a chewing gum manufacturer in 1948. Since then, the group has grown into Korea’s fifth-largest conglomerate and is now one of the most well-known corporate names in Korea and Japan, generating more than 88 billion dollars in annual revenue.