South Korean retail giant Lotte Group was thrown into disarray Tuesday as a Seoul court sentenced its chairman to 30 months in prison for bribery. (Image: Yonhap)
SEOUL, Feb. 13 (Korea Bizwire) — South Korean retail giant Lotte Group was thrown into disarray Tuesday as a Seoul court sentenced its chairman to 30 months in prison for bribery.
The sentence handed down to Shin Dong-bin, by the Seoul Central District Court, caught Lotte officials off-guard, as they did not expect a jail term.
“We respect the court’s judgment but the outcome is regrettable,” Lotte said in a statement.
The conglomerate said it will consult with its lawyers before taking the next steps, though it did not elaborate.
Shin was convicted of giving 7 billion won (US$6.4 million) in bribes to a foundation run by ex-President Park Geun-hye’s friend as he sought favors in winning a government license to run a duty-free business in Seoul.
Shin was immediately taken into custody following the court ruling, and was ordered to forfeit the same amount he offered to Choi Soon-sil, Park’s longtime friend and confidante, as bribes.
In December, Shin got a 20-month prison term in a separate embezzlement and breach of trust case, but the Seoul Central District Court suspended the sentence for two years.
Lotte said Shin’s absence could deal a big blow to a wide-range of issues, such as investments and the listing of Hotel Lotte, as well as overseas businesses.
The initial public offering of Hotel Lotte is one of the reform pledges that Shin Dong-bin has made as part of efforts to improve his group’s corporate image following a bitter feud with his elder brother for control of the sprawling business empire.
In 2016, Lotte pushed for the IPO of Hotel Lotte, but it has since gone nowhere.
Lotte is South Korea’s fifth-largest conglomerate, and runs businesses ranging from department stores and discount stores to hotels and fast food restaurants and an amusement park. The duty-free business is one of Lotte’s key sources of income.
The unprecedented jail term also comes as Lotte has been seeking to make inroads into Central Asia, Europe and the United States as it moves beyond China and Southeast Asia.
Shin’s absence could have a negative impact on overseas projects, such as mergers and acquisitions, because the group may not be able to make proper decisions in a timely manner without Shin’s final say, executives pointed out.
In 2016, Lotte Chemical Corp. canceled its takeover bid for U.S.-based petrochemical firm Axiall Corp. amid prosecutors’ probe into allegations of illegal slush funds and other shady business practices.
(Yonhap)
