Lotte Chairman Shin Freed as Court Suspends Corruption Sentence
Lotte Chairman Shin Freed as Court Suspends Corruption Sentence
(Bloomberg) -- A Seoul appeals court released Lotte Group Chairman Shin Dong-bin from jail after suspending a bribery and embezzlement sentence that had created a leadership vacuum atop the South Korean retail giant for almost eight months.
The Seoul High Court on Friday said the 30-month sentence was suspended for 4 years. Shin had been convicted following a series of probes into the retail-to-chemicals giant, including a bribery investigation that lead to the departure of former President Park Geun-hye.
The suspension follows a court decision earlier this year to release Samsung Electronics Co. Vice Chairman Jay Y. Lee, heir apparent to the country’s biggest conglomerate, after convicting him on white collar crime charges, including bribing Park. South Korea’s family-run conglomerates have faced rising pressure from a government that has vowed to weed out corruption at the groups and support minority shareholder rights.
Lotte will work to become a company committed to social responsibility and devoted to the national economy, Lotte Corp. said in a statement following the decision Friday.
A series of government probes into corruption allegations against Lotte executives led to convictions including the group’s founder Shin Kyuk-ho and his younger son Shin Dong-bin. Elder brother Shin Dong-joo was acquitted.
Lotte Group, which had about $100 billion of assets as of 2017, had been under investigation since 2015 when a family feud over control erupted into public view. Amid the rivalry between Shin Dong-bin and Shin Dong-joo, allegations of bribery and other corruption emerged, sparking the probe.
The intensifying regulatory scrutiny and investigations have stymied the company’s global expansion, leading to cancellations of a potential $4.5 billion IPO of a hotel unit and a bid for chemicals-maker Axiall Corp in 2016.
Shin Dong-bin became the largest individual shareholder of the group’s main holding company Lotte Corp., with a 10.5 percent stake, after a sweeping reorganization last year that helped consolidate his control by sidelining his older brother.
To contact the reporter on this story: Sohee Kim in Seoul at skim847@bloomberg.net
To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, ;Peter Pae at ppae1@bloomberg.net, Dave McCombs
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