Lotte founder Shin Kyuk-ho, whose mental and physical health have emerged as the center of focus amid a succession feud between his two sons, was diagnosed with Alzheimer's disease a few years ago, sources said Monday, a key factor which could impact the high-profile family dispute as the two sides are sparring to win favorable shareholders.
  

Sources at Lotte, the country's fifth-largest conglomerate, said that Shin was diagnosed with the condition that is known to incur memory impairment and dent thinking ability, roughly three to four years ago. They spoke on the condition of anonymity due to the sensitivity of the matter.
  

The sources said that Shin's two sons -- Dong-joo and Dong-bin -- as well as other relatives who are mired in the ownership dispute are well aware of his mental condition but have remained tight-lipped on it.

They said that his symptoms have substantially worsened this year, with group executives reporting cases in which the 93-year-old founder asked redundant questions within an hour of receiving reports on pending agendas. Shin, who used to receive a daily two-hour report, has now shortened the time to 30 minutes.
  

The sources also noted how he is increasingly relying on his eldest daughter, Young-ja, who is seen siding with the family's eldest son, Dong-joo, on the ownership issue.
  

But some family members said they have not recognized serious problems with his mental condition.
  

His younger brother, Shin Seon-ho, for instance, was quoted saying that Kyuk-ho is healthier than any of the siblings and "is likely to live until the age of 110."
  

Lotte Group released a statement on July 30, in which it said the founder is having problems with "movement and judgment due to his old age."
  

The two brothers who are vying against each other to get a stronger grip of the retail empire, however, have refrained from directly speaking about their father's health.
  

The ongoing feud, meanwhile, has again sparked market talk that Lotte may finally move to list Hotel Lotte, which serves as the de-facto holding company of the company's businesses in Korea, in efforts to simplify its complicated governance structure.
  

The luxury hotel operator holds an 8.83 percent stake in Lotte Shopping, a 12.99 percent stake in Lotte Aluminum and an 18.77 percent stake in Lotteria.
 

Previous attempts to do so had fallen through due to opposition from Kyuk-ho, according to a group official.
  

"A plan to list Hotel Lotte was discussed a few years ago, but general chairman Shin Kyuk-ho did not approve the plan. The ongoing crisis may trigger such a plan in efforts to improve its ownership structure in the mid-to-long term," the official added.
  

Lotte's current governance structure, which largely centers around a group of clandestine investment arms whose names translate to "L Investment Company," has raised criticism of the company's ownership structure as well as alleged moves to shuttle its profits from Korea to Japan.
  

A report by local brokerage Dongbu Securities also stressed the need for Lotte to set up a holding company, either by turning its affiliate Lotte Shopping into a holding firm or listing Hotel Lotte, going forward. (Yonhap)