Founder of S Korea Lotte Group given 4 years jail
AFP
AFP, SEOUL: The wheelchair-bound nonagenarian founder of South Koreas embattled Lotte retail conglomerate was convicted of embezzlement and breach of duty yesterday and sentenced to four years in prison.
Shin Kyuk-Ho, 95, founded the group in Tokyo in 1948 and built into a sprawling giant that today has dozens of units focused on food, retail and hotels in South Korea and Japan.
It is the fifth biggest of the chaebol, the family-run conglomerates that have powered South Koreas growth into the worlds 11th-largest economy, but are sometimes accused of murky business practices and overly-close ties with politicians.
Lotte has been a target of investigations since Shins two sons made headlines with a bitter public fight for control of the group, featuring personal attacks in which they accused each other of mismanagement, personality flaws, and of manipulating their frail, aged father.
The founder, his sons, his elder daughter and his mistress were all in the dock on multiple charges at the Seoul Central District Court.
Shin was accused of embezzling at least 128.6 billion won ($119 million) from the firm to benefit his relatives.
He was found guilty and sentenced to four years in prison, although the court said it could not specify the amount embezzled and allowed him to remain free on health grounds pending an appealhe has diseases of old age, including dementia.
The accused Shin disposed of company assets as if they were his own in betrayal of his responsibility, said presiding judge Kim Sang-Dong.
This case reveals how the founding families of chaebol attempt to obtain private gains from companies.
Shin shouted incoherently in court when the sentence was read out.
Prosecutors accused Shin and his son and successor as chairman Shin Dong-Bin of causing 77.8 billion won ($72 million) in damages to the group by renting out Lotte Cinema concessions at discounted rates to the founders eldest daughter and mistress.
The daughter was jailed for two years, while the mistressa former model and actress 39 years Shins junior, who came to his attention after winning a beauty pageantwas given a suspended sentence.
The court also found Shin and Dong-Bin guilty of enabling the mistress daughter to receive 10 billion won ($9.3 million) in salary from Lotte without doing any work.
But Dong-Bin was given a suspended sentence on the grounds he was not in a position to refuse his fathers orders.
Another son, Dong-Joowho lost the bitter succession battle when board members sided with his younger brotherwas cleared of all offences.
The case is only one of several issues assailing the Seoul-based Lotte group which has combined assets valued at more than $90 billion.
Dong-Bin is on trial separately in connection with the corruption scandal that brought down President Park Geun-Hye, with prosecutors seeking a four-year sentence in that case.
The company has also been targeted by Chinese authorities after it provided land to the South Korean government to host a US missile defence system, whose deployment has infuriated Beijing.
