Lotte Group chairman, founder banned from leaving country
By Lee Kyung-min
The prosecution has imposed travel bans on Lotte Group Chairman Shin Dong-bin and his father, group founder Shin Kyuk-ho, as its investigation widens into the fifth-largest conglomerate’s alleged corruption.
The travel bans and the following questioning of them are likely to accelerate the prosecution’s investigation into various allegations surrounding the group, including embezzlement, breach of trust, creation of slush funds and illicit inter-affiliate deals.
Investigators at the Seoul Central District Prosecutors’ Office said Friday a number of key executives at the group and its affiliates have been banned from leaving the country, including the chairman and the founder.
Prosecutors earlier raided their homes and offices but exempted the two from the travel ban. Speculation is that the ban this time indicates prosecutors secured evidence to prove their allegations.
The prosecution will summon the two for questioning sometime between late July and early August.
Prosecutors found that the chairman and the founder have received a total of 30 billion won every year from the group’s affiliates. While the group officials claim the money is dividends and paychecks, prosecutors believe part of the money came from illicit financial transactions among affiliates.
It is alleged that the group had some affiliates involved in other affiliates’ business, especially in dealings with foreign companies, allowing them to profit. The group is also suspected of having set up paper companies when investing in China, Russia, and Vietnam and creating slush funds.
Members of the owner family are also suspected of cooking the accounting books by exaggerating profits and unfairly helping their relatives’ firms win bids in business contracts.
The previous day, Shin Young-ja, the founder’s eldest daughter, was arrested for bribery and embezzlement. She allegedly took 3 billion won from companies in return for placing their counters in favorable spots at Lotte’s duty free shops, and embezzled 4 billion won in company funds by registering her three daughters as board members of a company owned by her son so they would receive salaries.