Investigation concludes Lotto Group’s fund misuse; chairman, founder to face trials
SEOUL, South Korea - South Korean prosecutors to charge Lotte group Chairman – Shin Dong-bin for alleged business irregularities and misappropriation of company funds on Wednesday.
93-year-old Lotte Group founder Shin Kyuk-ho and his son Shin Dong-joo are also part of the charge sheet, reports confirmed.
The founder’s daughter and his third wife are also facing bribery and tax fudging charges.
Concluding a thorough investigation commenced in June drew public attention when it revealed wide-spread corruption in the company and also led to Vice Chairman Lee In-won’s suicide. He was scheduled to be questioned that day. The probe seized billion-dollar deals and expansion of the fifth largest South Korean conglomerate with assets worth $92 billion.
Shin, however, has evaded an arrest warrant following the Seoul Central District Court’s rejection in granting an arrest warrant. But with the charges to be filed, Shin faces long-term trials.
A Lotte Group statement said, “We will try to fix various problems revealed during the investigation and will faithfully cooperate with the legal proceedings.”
The investigation and trials also cast doubt over the company’s future leadership. But the company is hopeful for Shin’s return as the allegations were not directly associated with him since it involves events occurred during his father’s leadership.
It all started last year when Shin’s older brother led a failed boardroom takeover. It earned an intense scrutiny that led to canceling a $4.5 billion initial public offering and also wrecked a bid for Axiall Corporation earlier this year. It was followed with the arrest of Shin’s elder sister Shin Young-ja, who has since been in jail over bribery and misappropriation.
Yet, Lotte Group is not the first to be charged with embezzlement.
In 2013, SK Group’s Chey was sentenced to prison for mishandling corporate funds. He received presidential pardon and was freed in August this year.