Fraud charges for S Korea's Lotte founding family

Fraud charges for S Korea's Lotte founding family

South Korean prosecutors on Wednesday charged the chairman of retail giant Lotte Group, along with his father and brother, with tax evasion and embezzlement following a lengthy corruption probe.

According to the indictment, chairman Shin Dong-Bin, 61, cost the country's fifth-largest family-run conglomerate 175 billion won (S$216 million) through a series of financial scams and irregularities.

Similar charges were levelled against Shin's father, Lotte's 93-year-old founder Shin Kyuk-Ho, as well as Shin's older brother Shin Dong-Joo.

The Seoul-based group, founded in Tokyo in 1948, has a vast network of businesses in South Korea and Japan including department stores, hotels and processed food, with combined assets valued at more than $90 billion.

It has been in the headlines since last year due to a bitter and very public fight for control of the group between Shin Dong-Bin and his older brother.

The dispute, which ended after the group's board members sided with Shin Dong-Bin, fuelled public criticism of how South Korea's dominant family-run conglomerates - known as "chaebol" - conduct their business affairs.

As public anger grew, the group came under tougher regulatory scrutiny and investigations that targeted the Shin family.

Late last month Shin Kyuk-Ho's wife and daughter were indicted for tax evasion and embezzlement.

The charges against the five Shin family members allege financial wrongdoing totalling some 280 billion won.

None of them have been taken into custody.

The chaebols spearheaded South Korea's drive to prosperity from the ashes of the Korean War, but their founding families have been criticised for running their global businesses like personal fiefdoms.

Top chaebol officials have made regular court appearances on fraud charges over the years.

Some have received heavy jail terms, only to be pardoned or released on early parole in light of their "past contributions" and importance to future economic prosperity.

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