Tue, Mar 21, 2017 - Page 6 News List

Family members of S Korea’s Lotte go on trial for graft

ALL IN THE FAMILY:Shin Dong-bin is accused of hurting the firm through tax evasion and scams. His brother, sister and father were also charged

AFP, SEOUL

Four members of the family who control South Korea’s troubled retail giant Lotte, including its 93-year-old founder, yesterday went on trial for embezzlement, tax evasion and fraud.

The proceedings against company chairman Shin Dong-bin, 61, his brother, sister and father — plus the patriarch’s mistress nearly 40 years his junior — come as the South’s fifth-biggest conglomerate endures a barrage of condemnation from China.

The company provided land to Seoul to host a US missile defense system, infuriating Beijing, and nearly 90 percent of its Chinese Lotte Mart stores have since been forced to close by either authorities or angry demonstrations.

The trial is the latest blow to the reputations of the family-run conglomerates, or chaebols, that powered South Korea’s economic growth in past decades.

More recently they have increasingly become the focus of public anger over inequality and corruption, as in the scandal that saw former South Korean president Park Geun-Hye removed from office earlier this month.

Shin is accused of costing the firm 175 billion won (US$155 million) through a series of tax evasions, financial scams and irregularities.

He has been also charged with negligence for awarding lucrative deals or paying “wages” worth millions of dollars to relatives who made little contribution to management.

“I am sorry for causing concern. I will cooperate with the trial sincerely,” Shin told reporters, bowing briefly before entering the courtroom yesterday afternoon.

Similar charges were leveled against his older brother Shin Dong-joo, his older sister Shin Young-ja, as well as their father, Shin Kyuk-ho, who arrived in court in a wheelchair, a gray blanket over his legs, but left after about 30 minutes for health reasons.

His 57-year-old mistress, former actress and model Seo Mi-kyung, was also accused of embezzlement for pocketing large sums in “wages” although she had little role in management.

It was the first public appearance by Seo after decades spent trying to avoid media attention.

Each of the five, who were formally indicted by prosecutors in October last year, denied all the charges against them.

The Shin family became targets of state probes after 2015 when a bitter and very public fight between the brothers for control of the group fanned public anger over how the chaebols conduct their business affairs.

The feud saw highly public mudslinging between the brothers, with accusations of mismanagement, personality flaws, and manipulating their frail father, whose mental faculties had been called into question.

The dispute ended after board members sided with Shin Dong-bin, but Lotte since then has come under tougher regulatory scrutiny.

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