South Korea prosecutors indict Lotte chairman, 21 others
The announcement marks the end of an investigation during which billion-dollar deals involving Lotte collapsed
South Korean prosecutors said on Wednesday they have indicted 22 current and former officials of Lotte Group including Chairman Shin Dong-bin, as well as two entire group companies, concluding a corruption probe at the country’s fifth-largest conglomerate.
The announcement marks the end of an investigation during which billion-dollar deals involving Lotte collapsed. Business at the retail-to-chemicals group is now expected to normalise, though those indicted are likely to undergo months-long trials.
The Seoul Central District Prosecutors’ Office said in a statement it indicted Shin and other members of Lotte’s owner-family, as well as present and past executives and employees, plus Lotte Home Shopping and Lotte Engineering & Construction Co Ltd during the probe which became public in June.
Prosecutors said they have charged Shin with embezzlement of about 50.8 billion won (US$45.2 million), and breach of trust involving about 124.9 billion won for perceived involvement in irregular payments to family members and unlawful support of group companies.
“We will clearly explain the issues that the prosecution deems problematic,” a Lotte Group spokesman said.
Shin is the latest chaebol leader – or boss at the family-run business groups that dominate Asia’s fourth-largest economy – to be charged for corporate crimes. Past cases involved the heads of Samsung Group, Hyundai Motor Group and SK Group.
Last month, the Seoul Central District Court turned down prosecutors’ request for an arrest warrant for Shin after he appeared at a court hearing, saying it did not view detention as necessary.
Though now indicted, Shin has not been detained and, like all defendants, is presumed innocent unless a court rules otherwise. That means he can continue running Lotte Group and its 103 trillion won (US$91.64 billion) worth of assets for the foreseeable future.
His group had been preparing a US$4.5 billion initial public offering (IPO) of Hotel Lotte Co Ltd, but shelved the plan after prosecutors’ investigation became public.
The group may not be able to restart the IPO while trials continue, but it plans to announce measures to improve governance and also seek mergers and acquisitions, a person with knowledge of the group’s discussions said on Wednesday.
The person was not authorised to speak with media about plans before official announcements and so declined to be identified.