The founder of South Korea retail giant Lotte Group is expected to lose his seat in the boardroom of a crucial affiliate in the group's governance structure, industry sources said Friday.

Lotte Holdings Co., the holding firm for the group's Japanese affiliates, is known to have decided to approve the resignation of Shin Kyuk-ho as a board member during its shareholders meeting at its headquarters in Tokyo on Saturday, according to the sources.

The firm's board of directors did not propose an extension of Shin's tenure earlier this month.

Lotte Holdings is at the top of Lotte's Japanese affiliates via a cobweb-like ownership structure and holds a 19 percent stake in Hotel Lotte Co., a de facto holding firm of the group's Korean units.

Earlier this month, South Korea's top court confirmed the designation of a nonprofit subsidiary of a law firm as the guardian of Shin, efficiently backing his second son and group chairman Shin Dong-bin's argument that his father lacks the mental capacity to make meaningful decisions.

The petition seeking guardianship over Shin was filed in December 2015 by the group founder's younger sister amid a bitter feud between his two sons over the managerial control of the group.

While the elder son, Shin Dong-joo, claimed that the founder handpicked him as the successor for the retail group, Dong-bin insisted that his father was unable to make reasonable judgments due to mental health problems.

The family feud virtually came to an end after the incumbent chairman won shareholder support in March last year to tighten his grip on the group.

The 94-year-old Shin has lost his board seats at Lotte's key affiliates as his tenure ended. The only company where he works as director in Korea now is Lotte Aluminium, but the tenure is also slated to end in August unless it is extended.

"We do have a shareholders meeting scheduled, but the results can be confirmed only after all the procedures are completed," a Lotte official said.

During Saturday's meeting, Dong-joo is expected to again propose his own designation as a board member and dismissal of his brother, but the incumbent chief is likely to win votes, as there has been no major change in the composition of boardroom members.

While Chairman Shin was caught up in the leadership battle, his whole family, including the founder, was put on trial on multiple corporate crime allegations. The conglomerate is also implicated in a graft scandal involving former President Park Geun-hye and her friend. (Yonhap)