Hwang Gak-gyu, Vice Chairman of Lotte Holdings, "The Family Knows the Deceased's Wishes Better While Alive" (Comprehensive)

Honorary Chairman Shin Kyuk-ho Avoids Direct Answer on 'Social Contribution' Intentions During Lifetime
"It Is a Matter for the Bereaved Family to Discuss," He Says
Late Honorary Chairman Shin Kyuk-ho's Estate Estimated at 1 Trillion Won

Hwang Gak-gyu, Vice Chairman of Lotte Holdings, is holding a press conference in front of the funeral hall of the late Shin Kyuk-ho, Honorary Chairman of Lotte Group, set up at Seoul Asan Medical Center in Songpa-gu, Seoul, on the afternoon of the 20th. [Image source=Yonhap News]

[Asia Economy Reporters Minyoung Cha, Seungjin Lee] Regarding the inheritance distribution issue of Shin Kyuk-ho, Honorary Chairman of Lotte Group, whose estate is estimated to exceed 1 trillion won, Lotte Group drew a line on the matter on the 20th, stating it is "a matter for the family to discuss."

On the afternoon of the second day of Shin's funeral, Hwang Kak-kyu, Vice Chairman of Lotte Holdings, met with reporters at the funeral hall of Asan Medical Center in Seoul and made this statement. Vice Chairman Hwang is serving as the funeral committee chairman for Shin, who passed away on the 19th due to old age.

When asked whether the late Honorary Chairman Shin had expressed any intention of donating his wealth to society during his lifetime, Vice Chairman Hwang avoided a direct answer, saying, "Since the family has been living more closely, I think they will discuss it among themselves." He added, "I have not confirmed whether he left a will due to family relations."

Honorary Chairman Shin Kyuk-ho's personal assets are estimated to exceed 1 trillion won, combining stocks and real estate. As of the first quarter of this year, he held shares in listed companies such as Lotte Holdings (3.10%), Lotte Chilsung Beverage (1.30%), Lotte Shopping (0.93%), and Lotte Confectionery (4.48%) in South Korea, as well as a 6.87% stake in the unlisted company Lotte Property & Development. The value of these holdings is known to exceed approximately 300 billion won. His real estate assets include a golf course site of 1,667,392 square meters in Moksang-dong, Gyeyang-gu, Incheon, estimated to be worth around 450 billion won. In Japan, he held stakes in unlisted affiliates such as Kwangyunsa (0.83%), Lotte Holdings (0.45%), LSI (1.71%), Lotte Green Service (9.26%), Family (10.0%), and Krispy Kreme Doughnuts Japan (20.0%).

Additionally, Vice Chairman Hwang shared anecdotes related to Honorary Chairman Shin. He said, "Looking back at what he used to say, his favorite word was 'challenge.' He said, 'Entrepreneurship is creation. It is a challenge to overcome countless hardships. If you stop challenging, the company stops.'"

He continued, "When he visited South Korea, he said he could not just show the palaces. Chairman Shin Dong-bin also did his best to fulfill the founder's wishes, and thus the Lotte World Tower, which the Korean people can enjoy, was built," he explained.

Lotte Group is conducting Shin's funeral as a group funeral to honor the late founder. The funeral procession is scheduled for 6 a.m. on the 22nd, and Shin will be laid to rest in his hometown at Seonyeong in Ulju-gun, Ulsan.

▲Below are Vice Chairman Hwang Kak-kyu's remarks and Q&A

=Our Lotte Group has developed, and during that process, there seemed to be some misunderstandings. According to Shin Kyuk-ho's usual philosophy, he was a person who believed in 'Geohwa Chwi-ji,' meaning the right hand should not know what the left hand does, so he did not boast much. Even though he pursued practical benefits, he did not seek excessive gains. Recently, Honorary Chairman Shin, who founded the company in Japan in the late 1970s and invested in South Korea to become one of the top five conglomerates, has been researching the history of how he lived and what kind of life he led. I thought it would be good to explain some unknown pieces to you.

=He started his business in Japan in 1946, initially in the cosmetics business. After some success, he began the chewing gum business. During this process, Honorary Chairman Shin's philosophy was to 'keep trust.' In English, it's 'trust.' Once a promise is made, it is kept to the end. As you know, after succeeding in the gum business and moving into the chocolate business, all banks said the chocolate business would not succeed because there were century-old chocolate companies like Meiji and Morinaga, so external investors discouraged it. Even internal employees, including the number one and number two players, opposed it, but he insisted it would definitely succeed and sought investment from banks. At that time, a certain Japanese general trading company helped a lot, and they still maintain business relations. Companies that helped during difficult times built mutual trust and continue to support each other.

=Between 1974 and 1977, when the Lotte Center in Sogong-dong was built, the company was named Lotte Shopping because foreign investors were prohibited from retail business under the foreign investment law at the time. I think that's why the company was named Lotte Shopping. The land was purchased in 1975. According to records, in 1977-78, significant investments were made during the construction of the Sogong-dong Lotte Shopping Center and hotel. The investment amount was said to be equivalent to that of the Gyeongbu Expressway. It was over 400 million dollars. According to 1978 records, about 70% of foreign direct investment in Korea came from Lotte Group bringing capital from Japan. At that time, Korea was in desperate need of foreign direct investment due to its economic scale. More than that, Japanese Lotte, established in 1948, had earned about 17 billion yen in equity capital over 25 years until the 1970s. The amount invested in Korea was about 40 billion won, which is 2.5 times the accumulated capital. It was a significant history of challenge. Of course, he must have judged that investing in his homeland was more profitable than investing in Japan. Within just 10 years of starting business in 1967, he made a huge investment in Korea, which continued and led to the creation of the Jamsil Lotte World you know well. To secure investment, he visited places and was impressed by the Head-Mount Indoor Theme Park in Canada, a city of 600,000 people, where families shopped and enjoyed themselves. He thought Korea could do the same. Of course, internally, there were concerns about large investments and the risk of not getting returns, but Shin judged that there was future potential in providing enjoyment. The Hanoi Lotte Center and the 38th-floor observatory in the 1979 Sogong-dong Lotte Hotel are examples. Shin always insisted that a tall building must have an observatory. Although it did not generate profit, he believed that customers having a good image of Lotte would enhance the brand image in the long term. He seemed to have many insights into providing enjoyment to consumers.

=He graduated from Waseda University in Japan with a degree in chemistry. Chemistry was important in the era of material prosperity, and cosmetics involved ingredients like glycerin to improve skin. Chewing gum started as bubble gum. In Korea, when we were young, 'Watda Gum' was the most famous. Looking at the history of Watda Gum, the largest company in Korea was Haitai Confectionery, which tried to catch up by making Watda Gum a hit. The largest company in Japan was Harisu Confectionery. When we launched Lotte Gum, Harisu was gum for adults, and we released bubble gum for children, catching up with Harisu within 10 years. During this process, as far as I know, they used what is now called advertising promotions, offering a first prize of 10 million yen at the time. It was a hit.

=After graduating in chemistry, the first business he wanted to invest in Korea was the petroleum business. According to him, he proposed it to the government, but unfortunately, Lotte did not get it; LG, probably today's GS Caltex, took it. The next business he wanted was steelmaking. In the 1960s, there was a TF team of 50 people within Lotte Japan preparing a project plan to enter the steel business. They submitted a project plan to the government to start steelmaking, but it was not allowed because it was a state-led project. The 50-person business report was apparently handed over to the government. Efforts are being made to uncover that project plan, and it is believed that Pohang Steel might have it. The layout of the first blast furnace at Pohang Steel is said to be identical to that of the Japanese steel mill. It is thought that the project plan was applied as is. Chairman Park Tae-joon and Chairman Shin Kyuk-ho were close friends; Park's hometown is Yangsan, and Shin's is Ulsan. Park was the president of Daehan Jungseok. The project plan was likely passed to Chairman Park. The subsequent project was the Sogong-dong Lotte Hotel and Shopping Center.

=He had various business ideas he wanted to pursue, but later he wanted to do business. If you go out at night and look, you can see the Lotte Tower right in front of you. You know the long history of Lotte World Tower well, but if you visit the exhibition hall, you will see efforts to make it even better. Around 2002-2003, I told the founder Shin Kyuk-ho that buildings over 100 floors cost a lot to build and were not profitable. At that time, Tower Palace apartments were selling well. We suggested building apartments instead, but he said that while it might be economically better, when he visited Korea, he said he could not just show palaces. He seemed to have a dream of leaving a masterpiece. We also think that building a landmark in Korea as he wished was most precious, and we told Chairman Shin Dong-bin that it would be difficult to go against the founder's will, so let's do our best to make it economically viable and enjoyable for the Korean people, which led to today's Lotte World Tower.

=Lotte World Tower is now known to everyone visiting Korea, and in the process, it has become a good opportunity to promote the Lotte brand, knowingly or unknowingly. Looking back at his words, his favorite word was challenge. Entrepreneurship is creation. He often talked about passion in work. He said that even if you don't know the way of working, you cannot do anything without passion. He said this a lot 40 years ago. At that time, when Lotte Japan was growing rapidly, he constantly talked about challenge and passion with employees. In that sense, we will do our best to lead the precious legacy he left us to become a global Lotte. Our employees also strive to uphold the precious legacy left by the founder. We want to take this opportunity to work harder again.

-Did he leave a will? How will the social contribution be handled?

=I have not confirmed whether he left a will due to family relations, so it is difficult to say.

-Is there a plan to discuss inheritance later?

=The heirs should discuss among themselves.

-It is known that the deceased expressed intention to donate remaining assets.

=Since the family has been living well, I think they have discussed it.

-Did Shin Yumi come?

=I don't know much about family matters.

-Did the two brothers talk inside?

=Since they were sitting side by side, I think they communicated.

-Can it be said that reconciliation has begun?

=I can't say...

-The farewell ceremony is on the 22nd; will it only circle the Lotte World Tower and end?

=No. As announced in the obituary, there will be a farewell ceremony and a tour around the tower. As you know, we have to go down to Ulsan, and since the road conditions before the Lunar New Year holiday are unpredictable, we will shorten the time in Seoul and adjust the schedule.

=The founder is a great person who built companies in Korea and Japan. I ask for positive articles from you. The first-generation founders like Chung Ju-yung, Park Tae-joon, and Shin Kyuk-ho played golf together and were self-made men with similar mentalities. I worked with him for 24 years since I was a department head at the group headquarters, and he always asked me, "Have you been there?" In 2003, I went on several business trips to acquire an Indian snack company. Negotiations with Indians were very difficult because they were tough and tricky. Anyway, he judged that the Indian market had potential and wanted to proceed quickly. He always asked, "Have you been there?" At that time, I showed him photos taken with a digital camera of auto rickshaws in India, and he said, "That looks just like the vehicle I used when selling snacks." He asked my age, and since I remembered Busan in the 1970s, I said I knew well. He said, "But the population is large, so hurry up."

=Secondly, when we hesitate in business or think we are not working hard enough, he said, "Let's try until the end; you can do well," and "Never give up." After that, he took responsibility for failures. During the IMF crisis, he gave stocks and helped struggling companies. During the Lehman Brothers crisis, he donated his own assets. We calculated that he donated about 300 billion won in 1998, which is worth 1 trillion won in today's asset value. He encouraged us to try until the end and took responsibility once we started. We will continue to carry on the founder's spirit of challenge and perseverance in our DNA.

This content was produced with the assistance of AI translation services.