[THE INVESTOR]
Lotte Group chairman
Shin Dong-bin is likely to be summoned by the prosecutors soon to be questioned for his role in a series of malfeasance charges that his company faces, now that his sister has been served with an arrest warrant.
On July 4, Shin Young-ja, 74, was issued a warrant on embezzlement and bribery charges. She is the first Lotte founding family member to be placed under arrest.
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Lotte Group chairman Shin Dong-bin The Invester / Lee Sang-sub |
Young-ja was questioned over the weekend for taking 3 billion won (US$2.59 million) worth of bribes from shops operating at Lotte Duty Free stores in the country.
Prosecutors now say that they are planning to call in her brother Dong-bin for questioning once they have gathered enough evidence.
In addition to dipping into corporate coffers to create illegal slush funds, Lotte is suspected of encouraging misconduct in inter-affiliate transactions -- all on the urgings of Dong-bin.
For instance, the Lotte group chairman reportedly instructed affiliates to engage in misconduct, such as forcing some subsidiaries to pitch in to aid the financially ailing Lotte PS Net, a maker of automated teller machines.
The embattled business tycoon arrived in Korea on July 3 after nearly a month abroad. Last week, he once again defending his control over Lotte against his elder brother
Dong-joo at a shareholders meeting initiated by Lotte Group’s holding company Lotte Holdings Japan.
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Shin Young-ja |
For now, the chairman has not made any indication about how he plans to handle the crisis and his impending summons from the prosecution. Lotte officials told media that he planned to remain in his office all day on July 4.
Meanwhile, the impact of the scandal is widening in scope. Lotte has already withdrawn its initial public offering of Hotel Lotte, the holding company of Lotte’s Korean operations, which was scheduled for later this month. The group has also dropped out of major overseas deals such as the acquisition of the US-based chemical firm Axiall by
Lotte Chemical.
By Won Ho-jung and Kim Ji-hyun (
hjwon@heraldcorp.com)
