TOKYO (Reuters) - Embattled Lotte Group Chairman Shin Dong-bin retained control of the conglomerate's Japan-based holding company on Saturday after shareholders rejected a bid by his older brother to oust him following government raids at its South Korean offices.

Shareholders in Lotte Holdings, which controls a sprawling corporate empire, voted down a motion proposed by Shin Dong-joo to remove his younger brother from the board at the annual shareholder gathering in Tokyo.

"His actions are not of someone who is taking responsibility," said the older Shin, who remains a shareholder in several companies. "This is inexcusable for a company that offers products and services to consumers," he added outside the meeting in Tokyo.

He vowed to continue his effort to remove his brother and said he would seek support at an extraordinary shareholder meeting to end his reign.

The younger Shin cemented control of the group last year after winning the support of a majority of shareholders amid a feud that has split the conglomerate's controlling family.

The South Korean government's investigation of the group is one the largest ever of a family-run "chaebol" in the country. The probe has already derailed a planned initial public offering (IPO) for Lotte's hotel and duty free unit worth up $4.5 billion.

Hotel Lotte's planned flotation of around 35 percent of its stock was meant to bolster corporate governance at a group whose ownership structure is convoluted even by the opaque standards of South Korea's conglomerates.

South Korean prosecutors are looking into a possible slush fund as well as breach of trust involving transactions among the group's companies, people familiar with the matter have said.

A Lotte Group spokesman has previously said the conglomerate would cooperate fully with the investigation but declined to comment further.

Named after the heroine of an 18th century Goethe novel, Lotte has grown from its founding in Japan 68 years ago as a maker of chewing gum to a corporate giant with interests ranging from hotels and retail to food and chemicals.

(Reporting by Ritsuko Shimizu; Writing by Tim Kelly; Editing by Ed Davies)