Travel ban slapped on Lotte’s CEO and founder

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Travel ban slapped on Lotte’s CEO and founder

Prosecutors on Friday imposed a travel ban on Lotte Chairman and CEO Shin Dong-bin and his father, Lotte founder Shin Kyuk-ho, in the latest development in the ongoing probe of alleged embezzlement at Korea’s fifth-largest conglomerate.

In June, the Seoul Central District Prosecutors’ Office kicked off a massive investigation into the retail giant, dispatching some 200 investigators to raid Lotte headquarters, seven affiliated companies and executives’ residences.

Prosecutors have yet to signal impending arrests of the father and son, but said they were facing charges of creating slush funds, embezzlement and corporate malpractices.

A Lotte executive last month said under questioning that the father and son were paid some 30 billion won ($26 million) every year from Lotte affiliates.

Although the Lotte executive claimed the payments were salaries and dividends, prosecutors are trying to see if the money was basically slush funds.

Lotte Chairman Shin Dong-bin returned to Seoul last Sunday after attending a general assembly of the Federation of International Skiing in Cancun, Mexico, and a ceremony in Louisiana celebrating the groundbreaking of a Lotte Chemical factory.

On Thursday, in a separate probe, Shin Young-ja, 74, executive director of the Lotte Scholarship Foundation and the eldest daughter of Lotte’s founder, became the first member of the Lotte chaebol family to be arrested.

Prosecutors suspect Shin received bribes worth some 3 billion won from local companies in return for allowing them to open outlets in Lotte Duty Free, including the major cosmetics brand Nature Republic.

Shin also faces allegations of siphoning some 4 billion won from another company she reportedly helps manage.

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