October 07, 2016 13:04
Lotte Group founder Shin Kyuk-ho's third wife Seo Mi-kyung and her daughter Yoo-mee own a combined 6.8-percent stake in the conglomerate's holding company.
Seo and her daughter had remained largely under the radar as the owner family went into meltdown, but their identities came to light during a massive corruption probe.
The investigation revealed that Seo and her daughter together own a bigger slice of the conglomerate than the founder's two sons Shin Dong-joo (1.6 percent) and Shin Dong-bin (1.4 percent), who are at daggers drawn over who gets to run it.
The value of Seo and her daughter's stakes are estimated at around W700 billion (US$1=W1,113). According to a Lotte executive on Thursday, the founder handed over a 3.6-percent stake in Tokyo-based Lotte Holdings to Seo and her daughter in 1997. At the time, the shares they were worth 50 yen per stock (around W500).
The executive said the Lotte Group founder "felt sorry" for the women, who had been living in virtual hiding because Seo was the elderly founder's new mistress. It is unclear whether they are legally married even now.
He gave the two women another 3.2-percent stake in Lotte in 2003.
But once their holdings became known, concerns arose that they could use their casting votes to meddle in management.
In March this year, Seo and her daughter rejected an offer by Shin Dong-joo to buy their stake for W750 billion as he was trying to get control over the conglomerate, which had thrown its weight behind his brother. Instead, Seo later offered to sell her stake to chairman Shin Dong-bin, but that fell apart when he became a target of the corruption probe.
Lotte says a majority of shareholders still support Shin Dong-bin, which would mean that Seo and her daughter could not exercise a decisive vote either way.
One industry source said, "Seo and her daughter are probably more interested in selling their stake for a profit than in gaining management control."
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