Lotte’s Shin flies home to face a widening probe
Lotte Group Chairman Shin Dong-bin walks into the arrival area of Gimpo Airport on Sunday. [NEWSIS]
Shin made short comments in the arrival area of the Gimpo Airport, saying “I apologize to the people for their concern, and [I] will sincerely cooperate with the prosecutors and the investigation.”
The chairman left Korea on June 7 to attend a general assembly of the Federation of International Skiing in Cancun, Mexico, and continued his overseas trip to Louisiana to celebrate the groundbreaking of a Lotte Chemical factory. Last week, Shin flew to Tokyo to participate in a shareholders’ meeting of Lotte Holdings, where he again cemented his position at the expense of his older brother Shin Dong-joo, who continues to fight to regain control of the group.
Pressure is mounting on the chairman as prosecutors began summoning members of his family for questioning. Shin Young-ja, executive director of the Lotte Scholarship Foundation and eldest daughter of Lotte Group founder Shin Kyuk-ho, was summoned by prosecutors on Friday.
Asked about the accusation that Shin Young-ja received about 1 billion won ($870,056) in bribes from Jung Woon-ho, CEO of Nature Republic, the chairman said, “I didn’t know.”
Shin said he will “consider” visiting his 95-year-old father who is hospitalized for a slight fever at the Asan Medical Center in southeastern Seoul.
The chairman is expected to start preparing for the investigation at his office in Sogong-dong, central Seoul on Monday.
“It is a clear fact that the ongoing investigation is targeting the chairman,” said a market insider. “It is highly likely that he will soon be called in.”
The second son of the Lotte founder is being accused of creating slush funds of several trillion won from corporate money that was invested in the group’s China business, of embezzlement and breach of trust during the process of some acquisitions of overseas businesses, and taking unfair profits from Seoul-based Lotte Chemical via Tokyo-based Lotte Corporation.
Some of those accusations and the latest official probe are based on documents given to the prosecution by Shin Dong-joo, the eldest son of the founder, and his supporters.
However, Shin Dong-bin once again solidified his control over the group’s Japanese business last week, securing a majority of the votes from shareholders at the Lotte Holdings’ general meeting held in Tokyo last week.
Shin Dong-joo proposed at the recent Tokyo meeting to dismiss Lotte Holdings’ current directors, including director Shin Dong-bin and President Takayuki Tsukuda, and to appoint himself as the director of the Japanese company. Both proposals were voted down.
The latest meeting was considered an especially vital chance for the eldest son to regain authority, considering the difficulty the group has been facing due to the intensifying probe against its affiliates for improper business transactions and lobbying.
The widening probe against the group has jeopardized most of its business expansion plans for this year, including the 5.7 billion won listing of Hotel Lotte, which was expected to be the biggest public offering in Korean history. Also, an acquisition of the U.S.-based chemical company Axiall by Lotte Chemical was withdrawn after the investigation began.
BY SONG SU-HYUN [song.suhyun@joongang.co.kr]
with the Korea JoongAng Daily
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