10-year sentence demanded for 95-year-old dementia patient?

Prosecutors rapped for being too cruel to business leaders

By Yoon Sung-won

Lotte founder Shin Kyuk-ho

The prosecution is increasingly demanding heavy punishments for business leaders under the Moon Jae-in administration.

While the move shows the authority’s firm resolution for justice in business circles, concerns are looming over the feasibility of such heavy punishments and consequent negative influences on the operation of major conglomerates here.

Last week, the prosecution demanded a 10-year prison term and a fine of 300 billion won for Lotte Group founder Shin Kyuk-ho for embezzlement, breach of trust and other charges during his final hearing at the Seoul Central District Court.

“We came up with the decision because Shin was the one who determined and ordered the crimes in the first place,” the prosecutors said. “Even in consideration of his age and health, strict criminal punishment is inevitable.”

The Lotte Group founder was indicted in October for a series of irregularities, including ordering the company to pay 50.8 billion won in wages to family members who had never worked for the company.

He was also accused of having transferred his shares in Japan-based Lotte Holdings to family members at face value to help them evade about 70 billion won in gift taxes.

However, the 10-year prison term seems unfeasible as the defendant is a 95-year-old suffering dementia, according to industry sources. Last week, Shin didn’t even remember why he is standing trial.

For this reason, the defense counsel is likely to ask the court to suspend execution of confinement. Under Korean law, patients with advanced age or illness who can hardly be treated in prison can temporarily be released. Also, the court may give Shin a suspended sentence or lighter punishment due to his age and illness.

“Though it is true that Shin’s health is very bad, we will calmly wait for the court’s determination,” a Lotte official said.

On Oct. 30, prosecutors also demanded 10 years in prison and a 100 billion won fine for Lotte Group Chairman Shin Dong-bin, who is the group founder’s son, over similar charges.

Aiming at refreshing the group after a series of scandals since last year, Lotte launched a holding company and successfully listed it on Seoul bourse on Oct. 30. But on the same day, the chairman faced heavy punishment demanded by the prosecution.

Under the new slogan “New Lotte,” the chairman has been expected to aggressively push for mergers and acquisitions as well as listing of the Lotte Hotel. But if he is sentenced to an actual prison term at his upcoming trial on Dec. 22, Lotte and its chairman’s drive is also likely to be thwarted.

Samsung Electronics Vice Chairman Lee Jae-yong, the de-facto chief of the nation’s largest conglomerate, also faced a similar fate.

In August, the special prosecution investigating the corruption scandal involving former President Park Geun-hye and her confidant Choi Soon-sil demanded a 12-year prison term for Lee, for allegedly offering over a 43 billion won bribe to Park and Choi. Later, Lee was sentenced to five years in prison by Seoul Central District Court.

The heavy punishments demanded by the prosecutors are in stark contrast to the prison sentences other business leaders in the past. Conglomerate chiefs including Hanjin Group Chairman Cho Yang-ho, SK Group Chairman Chey Tae-won, Doosan Group Chairman Park Yong-mann, Hyundai Motor Group Chairman Chung Mong-koo and Samsung Group Chairman Lee Kun-hee all were sentenced to only three years in prison or a five-year suspended sentence.