Lotte chief jailed in S Korea scandal
A Seoul court jailed Lotte Group Chairman Shin Dongbin for bribery, leaving the nation’s largest retail group leaderless as the conglomerate seeks to navigate a planned initial public offering of its hotel unit and China relations threaten the sale of a chain of stores there.
Shin was sentenced to 30 months in prison after the Seoul Central District Court found him guilty of charges stemming from Lotte’s decision to give 7 billion won ($6.5 million) to a confidante of former President Park Geun-hye, allegedly in exchange for government favors in providing a license to operate duty-free stores. Prosecutors had sought a four-year jail term.
He becomes the second head of a top conglomerate to be imprisoned for seeking to curry favor with impeached President Park by bribing one of her confidantes. The de-facto head of technology giant Samsung Electronics was jailed last year in a related trial but he was unexpectedly released last week on appeal, in a ruling that was perceived as a setback to government pledges to curtail the power of the nation’s corporate elite. For Lotte, the decision comes after a sweeping reorganisation last year that created a holding company for many of the companies assets and consolidated Shin’s control.
“We respect the court’s decision, but the result is very regretful,” Lotte said. “We are concerned that this could have a big negative impact ahead of the planned Hotel Lotte IPO and completion of the holding company and on investment as well as employment.”