The Korea Herald


Samsung Lee's appeal puts spotlight on Lotte Chairman Shin's verdict

By Son Ji-hyoung

Published : Feb. 6, 2018 - 16:12

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The ruling Monday that reduced the sentence of Samsung Electronics Vice Chairman Lee Jae-yong is bringing attention to Lotte Chairman Shin Dong-bin’s court verdict slated for next week.

Monday’s verdict, which freed Lee, is expected to set the bar for how rulings on bribery charges involving family-run conglomerate owners will unfold.

Lotte’s Shin, 62, will face a court verdict at the Seoul Central District Court on Tuesday on charges of bribery worth 7 billion won ($6.4 million) to a foundation run by Choi Soon-sil, a friend of impeached former President Park Geun-hye. The date for the verdict was postponed from Jan. 26. The bribes were alleged to have been used by the K-Sports foundation to build a sports facility. 

(Yonhap) (Yonhap)
Shin has been suspected of seeking favors in regaining a license for a duty-free business in Seoul after losing one in 2015. Lotte regained the license in March 2016. Shin has denied the accusation.

This is part of the corruption scandal involving the former president. Park and Choi are alleged to have swindled a combined 59.2 billion won in bribes from local conglomerates.

Prosecutors demanded a four-year jail term for Shin, as well as a penalty worth 7 billion won for the bribe allegation.

But the successful appeal of the Samsung Group heir apparent, who received a suspended prison sentence, indicated that the court viewed a majority of the funds -- worth a combined 43.3 billion won -- given to Park and Choi as not linked to the government’s backing of Lee’s succession.

A special counsel has argued that the fund was linked to the state-led National Pension Service’s backing of a merger in September 2015 between two Samsung Group affiliates -- Samsung C&T and Cheil Industries -- paving the way for Lee’s succession of power from Samsung Electronics Chairman Lee Kun-hee. NPS was one of the major shareholders of Samsung C&T before the merger.

But the appellate court viewed the merger as a “business decision” and said there was a lack of evidence as to whether Lee had asked for help while giving the funds. The court ruling also indicated Park appeared to be unaware of Lee’s succession plan.

Attention is now on whether the court will reject the argument that the 7 billion won given by Shin to the K-Sports foundation was related to gaining the right to operate a duty-free store in Seoul as proof of bribery.

In a separate ruling in December 2017 Shin received a suspended sentence for breach of trust. In a ruling by a district court, Shin was handed down one year and eight months behind bars, suspended for two years. Prosecutors had charged Shin and his family for inflicting 130 billion won in losses on Lotte’s affiliates.

Shin appealed to the high court immediately after the release. Shin’s trial on breach of trust in the appellate court has yet to begin.

By Son Ji-hyoung