South Korean retail giant Lotte Group kept its jailed chairman in a key affiliate post Friday despite an effort by his brother to oust him, re-igniting a bitter family feud. The company has been assailed by scandal in recent years, with the founder's two sons engaging in a vicious and public battle for control.
The younger, Shin Dong-bin, ultimately prevailed, but was jailed for two and a half years in February in connection with the corruption scandal that brought down president Park Geun-hye. His brother Shin Dong-joo reopened hostilities Friday and tried to have his sibling ousted from the board of an important Japanese affiliate, only for shareholders to stick with the incarcerated executive. In a statement, Lotte said it was "relieved" at the decision that came despite what it called the "absence" of its chairman. "We hope to promptly overcome the current difficulties," it added.
South Korean business is dominated by the chaebol, sprawling but controversial family-run empires like Lotte Group, ranked fifth, and the biggest of them all Samsung. The chaebols were instrumental in South Korea's rise to become the world's 11th-largest economy, aided by low-interest loans and close government connections.
But now they are criticised for stifling innovation and competition, while the controlling families are accused of running the firms like personal fiefdoms with minimal regulation by officials. Family feuds and criminal charges - often related to tax evasion or bribery - regularly make headlines. Samsung scion Lee Jae-yong was jailed last year for his own role in the Park scandal, although most of his convictions were quashed on appeal.
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