April 24, 2024

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[THE INVESTOR] The prosecution is likely to indict Lotte Group Chairman Shin Dong-bin for alleged embezzlement and tax evasion, but it remains undecided on whether to detain him or not.

After 18 hours of questioning, Shin left the prosecutors’ office in Seoul early Monday. He said he sincerely responded to the prosecutors’ questions, without elaborating. The tycoon has reportedly denied allegations he created slush funds and evaded taxes. He denied suspicions he shifted damages from failed mergers and acquisitions attempts to Lotte affiliates, saying such actions were taken through management decisions.

Lotte Group Chairman Shin Dong-bin. The Investor

According to local reports, some prosecutors are raising their voices to seek a warrant for Shin’s arrest on charges of embezzlement and breach of trust amid growing concerns the tycoon might lose his control over Lotte to executives in Japan.

Tokyo-based Lotte Holdings holds more than 90 percent stake in Hotel Lotte, the de facto holding company of Lotte’s operation in Korea.

Lotte Group in Korea has also reportedly requested the prosecution not detain Shin, saying his absence could stir another power struggle within the ownership family. Shin went through a series of bitter fights with his elder brother Shin Dong-joo, who called himself the legitimate heir to the nation’s fifth-largest conglomerate.

The prosecution has said it would take “external factors” into account for deciding the chairman’s fate. It plans to conclude the matter within this week.

By Cho Chung-un/The Korea Herald (christory@heraldcorp.com)