Lotte Group founder Shin Kyuk-ho is being ousted as chief executive of Lotte Holdings Co. in Japan in the latest succession scuffle between his two sons.
The move comes after his eldest son failed to dethrone Shin's younger son and heir-apparent Shin Dong-bin, who is currently co-CEO at the Japan unit of the family-controlled conglomerate.
Shin will be appointed as the Lotte Holdings' honorary chairman to "prevent those who have nothing to do with management from abusing Shin's legal positions," Lotte Group in South Korea said in a statement.
The move solidifies the youngest son's control over the Japan holding company. He successfully blocked his older brother, Shin Dong-joo's attempt at gaining control.
According to Lotte Group, Shin Dong-joo, who is also the eldest son of the founder and former vice chairman of Lotte Holdings, took his 92-year-old father to Japan on July 27 and made him dismiss other executives at the Japanese company.
Lotte Holdings' board of directors held a meeting on July 28 to nullify the dismissals, saying Shin Dong-joo didn't follow legal procedures. The board also decided to move the founder into the honorary chairman role, which typically carries no specific duties or voting rights.
Lotte Confectionery Co. shares rose as much as 16 percent in Seoul trading on Wednesday, while Lotte Shopping Co. gained as much as 13 percent.
Shin Dong-joo, the eldest son, owns 3.95 percent in Lotte Confectionery and his younger brother, Shin Dong-bin, holds 5.34 percent as of March 31. The brothers hold about 13 percent each in Lotte Shopping as of March 31.