April 26, 2024

• 

[THE INVESTOR] Lotte Group Chairman Shin Dong-bin appeared at the prosecutors’ office on Sept. 20, the culmination of a widening probe into the retail giant’s alleged embezzlement and slush fund creation.

It is the first time that a head of the nation’s fifth-largest conglomerate has ever been summoned by prosecutors since its establishment back in 1967.

The Seoul Central Prosecutors’ Office plans to question the Lotte chief whether he has played a decisive role in the process of several corruption allegations. 

Lotte Group Chairman Shin Dong-bin responds to reporters at a Seoul prosecutors' office on Sept. 20. The Investor/Park Hyun-koo

Shin is facing charges of having been engaged in large-scale embezzlement while aggressively expanding Lotte Shopping’s Chinese operations, which reportedly led to some 3 trillion won (US$2.70 billion) in losses.

The company is suspected of embezzling funds after acquiring China-based supermarket chain TIMES in 2009 and TV home shopping channel Lucky Pie in 2010 above-market prices. 

Related article : 

5 members of Lotte founding family may face indictment

The prosecution is also examining whether Hotel Lotte claimed any illegal profits by manipulating real estate value when acquiring Lotte Jeju Resort and Lotte Booyeo Resort through a merger in August 2013. Lotte is alleged to have created a slush fund with the gains in question.

Shin is also under suspicion of receiving an annual 10 billion won from Lotte’s Japanese units even though he is not directly involved in their management.

The total embezzlement and breach of trust charges he faces is worth about 200 billion won, according to the prosecution.

Since launching a large-scale probe into Lotte on June 10, the prosecution plans to indict five members of the founding family, including founder Shin Kyuk-ho, his two sons -- Chairman Shin Dong-bin and his elder brother Shin Dong-joo -- daughter Shin Young-ja and his common-law wife Seo Mi-kyung.

By Lee Ji-yoon (jylee@heraldcorp.com)