Death of No. 2 man clouds Lotte Group

Lotte Group employees enter the group’s headquarters building in Sogong-dong, central Seoul, Friday. The group’s Vice Chairman Lee In-won was scheduled to be summoned by the prosecution Friday over an alleged corruption scandal, but was found dead the same day from a presumable suicide. / Korea Times file

By Yoon Ja-young

The suicide of Lotte Group Vice Chairman Lee In-won is expected to severely impact the management of the country’s fifth largest conglomerate which is being investigated by the prosecution over allegations of corruption.

The 69-year-old Lee who served at Lotte for 43 years was the group’s No. 2 man as well as the closest aide to group Chairman Shin Dong-bin and also group founder Shin Kyuk-ho.

Lotte Group said that Lee controlled the overall management of the group and its core businesses, molding coordination between subsidiaries follow the intentions of the owner family.

“He continued in his efforts to expand future growth industries so that Lotte Group could continue achieving high growth,” a spokesman said.

The management ordered its subsidiaries to protect employees from the incident.

Lotte will inevitably suffer from the vacancy in top management, considering that many of the closest aides to the group chairman are also in trouble. Along with Lee who took his own life, So Jin-se and Hwang Gak-gyu, both executives at group policy headquarters, and Roh Byung-yong, CEO of Lotte Corporation, are close aides to Shin Dong-bin.

Roh was taken into custody by prosecutors over a toxic humidifier disinfectant scandal. So and Hwang, who have already been questioned by prosecutors, may also face further legal procedures.

Lee, who majored in Japanese at Hankuk University of Foreign Studies, joined the group in 1973. After working at Lotte Hotel for 14 years, he moved to Lotte Shopping, where he became the CEO in 1997.

He entered the very core of the group in 2007, joining the group policy headquarters where the management strategy for the whole group is planned, and assisting Shin Dong-bin, the founder’s second son. He was then promoted to vice chairman of the group policy headquarters in 2011, the first time this happened for someone who was not a member of the owner family of Lotte Group. He had been overseeing around 90 subsidiaries of the group, from funding to all key decisions in management.

Lee was also in charge of safety at Lotte World Tower in southern Seoul, the skyscraper that has been plagued by safety concerns. He was also in charge of the committee to improve the corporate culture at Lotte Group created last September, following criticism about the group’s murky governance structure that came to light after the feud between the Shin Dong-bin and his elder brother over managerial control of the group.

Lee was scheduled to be summoned by the prosecution Friday over the group’s corruption scandal, including allegations about a slush fund and also tax evasion by members of the owner family. Having served at the core of the group for over 20 years, he was cited as someone who knew more than anybody else about the inside workings of the group. The prosecution, which was planning to summon other key figures of the Lotte Group scandal, said it will have to reschedule the investigation due to Lee’s suicide.