Date
18 December 2017
Lotte chairman Shin Dong-bin (center), seen here talking to reporters at the prosecutors' office in Seoul last month, is accused of financial crimes that allegedly cost the group more than 175 billion won (US$156 million). Photo: Bloomberg
Lotte chairman Shin Dong-bin (center), seen here talking to reporters at the prosecutors' office in Seoul last month, is accused of financial crimes that allegedly cost the group more than 175 billion won (US$156 million). Photo: Bloomberg

Lotte chairman, executives indicted over corruption

South Korean prosecutors indicted the head of Lotte Group for alleged embezzlement and breach of fiduciary duty.

Concluding one of the country’s biggest corruption probes in years, prosecutors said chairman Shin Dong-bin’s actions cost Lotte more than 175 billion won (US$156 million), Bloomberg reports, citing a statement from the prosecutors’ office on Wednesday.

They also indicted Shin’s older brother and his father, who founded the group, for alleged financial crimes.

Shin, 61, is the most prominent Korean businessman to face trial since SK Group chairman Chey Tae-won was jailed in 2013 for embezzlement.

The charges are the latest setback for Lotte, which has been plunged into crisis after crisis for more than a year.

The move also raises the question of who will be in charge of the sprawling business empire that generates more than 100 trillion won in annual revenue.

Lotte Group said it will explain itself in trial and will continue to strive to become a good enterprise.

After a four-month investigation into Lotte, prosecutors announced charges against 24 parties, including five members of the founding family, and accused the Shin clan of engaging in financial crimes amounting to almost 280 billion won, the statement said.

Among other charges, the chairman is accused of colluding with family members to sell the rights to operate snack bars at Lotte’s movie theaters for “dirt cheap” to his kin, resulting in more than 77 billion won in losses for Lotte Shopping Co.

Lotte’s turmoil began last year, when a family feud erupted into public view after the chairman’s older brother led a failed boardroom coup.

Since then, Lotte has faced intensifying regulatory scrutiny and investigations, which took a toll on the group’s business.

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CG

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