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[LOTTE CRISIS] 5 members of Lotte founding family may face indictment

[THE INVESTOR] As many as five members of the founding family of Lotte Group -- Korea’s fifth-largest conglomerate -- have either been questioned or face indictment in relation to the prosecution’s ongoing investigation into corporate malfeasance.

Lotte Group Chairman Shin Dong-bin is scheduled to be summoned for questioning on Sept. 20 on a broad range of allegations, most of them involving embezzlement and breach of trust.


Some sources say the amount concerning his involvement may reach up to 200 billion won (US$179.05 million). Previously, his elder brother Shin Dong-joo was questioned on charges of being overpaid by Lotte. He allegedly received up to 40 billion won in salary from Lotte’s Korean affiliates over 10 years.


Lotte Group founder Shin Kyuk-ho (center) and his two sons Dong-joo (left), Dong-bin. The Investor
Lotte Group founder Shin Kyuk-ho (center) and his two sons Dong-joo (left), Dong-bin. The Investor


Their father, Lotte Group founder Shin Kyuk-ho, was also questioned for allegedly creating slush funds, while their sister Shin Young-ja is already behind bars for receiving bribes and embezzlement.

Further, the prosecution may summon Seo Mi-kyung, the common-law wife of the Lotte founder who is suspected of dodging taxes when he bequeathed a part of his wealth to her and their daughter.

With the addition of Shin Dong-bin, this cases marks the most number of founding family members to be summoned in the history of Korean conglomerates.

In 2008, Samsung Electronics Chairman Lee Kun-hee was the only person to be summoned on charges of creating slush funds, and in 2013, CJ Chairman Lee Jay-hyun was the sole CJ official to be summoned when CJ faced similar charges.

The situation was the same for the investigation into SK, when the two sons of the founding family were indicted. Korean prosecutors began an investigation into Lotte Group in June based on allegations that the company has systematically and consistently been engaging in acts of corporate malfeasance such as embezzlement and breach of trust.

By Kim Ji-hyun (jemmie@heraldcorp.com)
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