Lotte chief, family members face embezzlement charges

Lotte chief, family members face embezzlement charges

SEOUL - South Korean prosecutors concluded its four-month probe into irregularities at Lotte Group on Wednesday, indicting group chairman Shin Dong Bin, four other family members and company executives on charges of embezzlement, tax evasion and corporate malpractice.

But the prosecution failed to address other core suspicions surrounding Lotte - such as the existence of a large-scale slush fund and bribery involved in scoring approval to build the Lotte World Tower in Seoul.

The prosecution also failed to acquire a warrant to arrest the incumbent Lotte chairman due to insufficient evidence.

Nonetheless, the Seoul Central District Prosecutors' Office has revealed that Lotte's founding family and executives together engaged in criminal activities worth 375.5 billion won (S$463 million).

Of this, around 146.2 billion won pertained to funds allegedly embezzled by 94-year-old Lotte founder Shin Kyuk Ho, his two sons Dong Bin and Dong Joo, his daughter Shin Young Ja and his mistress Seo Mi Kyung.

"The investigation unveiled extremely severe misconduct that treated corporate assets and funds as the family's private property, made possible by an opaque holding structure," the Seoul Central District Prosecutors' Office said.

Lotte Group apologised for causing public concern and vowed to "sincerely explain its position in the forthcoming trials".

According to the prosecution, Kyuk Ho was found to have formed paper companies abroad to evade some 115.6 billion won in taxes while passing on his stake in Japan-based Lotte Holdings to his daughter Young Ja and common-law wife Seo.

Kyuk Ho and Dong Bin were charged with handing over some 50 billion won to family members, by listing them as board members of Lotte affiliates without assigning any responsibilities.

The two are accused of causing damages worth 77.8 billion won to Lotte Shopping by selling the operational rights to Lotte Cinema stores at below-market prices to Seo and Young Ja.

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