Lotte leadership indicted for embezzlement and tax evasion
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Loading... - FRANK HAYES
- 19 Oct 2020
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South Korean prosecutors have indicted key members of the founding family of the Lotte conglomerate with embezzlement and tax evasion.
In total, 22 current and former officials have been indicted, including 93-year-old founder Shin Kyuk-Ho and current chairman Shin Dong-bin.
The move is the latest twist in a continuing probe into the country's fifth largest conglomerate.
Lotte said: "We will continue to strive to build a good company."
In a statement, the company added: "We have been seriously reflecting on what efforts Lotte should make for society and for the national economy."
It is alleged that the five family members, including 61-year old chairman Shin and his father, together evaded a total $76m (£61.2m) in taxes and embezzled $46m of company funds.
The prosecutors also said the Shin family members incurred some $123m in losses to Lotte's various companies as they used the family influence to control corporate funds making decisions in their interest rather than that of the shareholders.
Shin Dong-binImage copyrightREUTERS
Image caption
Though indicted, chairman Mr Shin has not been detained and can continue in his role leading the group
Lotte Group has more than 90 firms in sectors as diverse as beer, hotels and chemicals, and has annual revenues of about $60bn, according to the Korea Fair Trade Commission.
Lotte is Korea's fifth-largest conglomerate and is considered one of Korea's family-run "chaebols" which are known to have complex ownership structures.
Mr Shin is the latest chaebol leader to be charged for corporate crimes. Past cases involved the heads of Samsung, Hyundai Motor and SK Group.
Though indicted, chairman Mr Shin has not been detained and can continue in his role leading the group.
Since the scandal became public, it has already led to the firm pulling out of a share sale worth as much as $4.5bn for its hotel unit.
The scandal has also been linked to the apparent suicide of one of the company's top executives. In August, then vice chairman Lee In-won was found dead hours before he was to be questioned in the corruption probe.
