It is not made perfectly clear, on the surface you hear hojo claiming he is the father, and you hear that lucrecia was raped through vague messages, but it is not stated as a fact that he is his father, there is a huge speculation if vincent might be his father, vincent loved lucrecia, and lucrecia was at a point very interested in vincent, if you have ever played ff7, and gone to the secret cave, you get this information
killing the president of shinra made it clear that if sephiroth wants anything from them, he gets it, great power to have for sephiroth