Lotte Family Feud Causes Plummet in Stock Prices

luvsmiling, Aug. 4, 2015, 8:39 a.m.


Shares of Lotte Group affiliates took a nosedive on Monday as a bitter family feud over control of the retail empire showed signs of dragging on. Competition for control typically acts as a share price catalyst, but Lotte's case is different since its parent company is based in Japan, and the deepening feud between the ailing owner and his sons has increased uncertainties.



Shares of Lotte Shopping, Lotte Chilsung and the conglomerate's five other subsidiaries plunged W1.74 trillion on Monday, causing their total market cap to close at W23.85 trillion (US$1=W1,168). 



Hana Daetoo Securities analyst Park Jong-dae said, "The management dispute, which seemed restricted to a small handful of key affiliates such as Lotte Shopping and Lotte Confectionery until last week, appears to have spread to the entire conglomerate." Park said a lack of transparency in governance and concerns over stable management "now threaten the very image of the conglomerate."

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