By Kim Bo-eun
Lotte Group Chairman Shin Dong-bin received a 20-month prison term suspended for two years after a court found him guilty of breach of trust Friday.
In the ruling on the founder family of the retail group, the Seoul Central District Court handed his father and group founder Shin Kyuk-ho a four-year sentence and fined him 3.5 billion won.
The court sentenced his sister Shin Young-ja, head of the Lotte Foundation, to a two-year term, but acquitted his brother, SDJ Corp. Chairman Shin Dong-joo. It sentenced Shin Kyuk-ho’s common-law wife Seo Mi-kyung to a two years in jail suspended for three years.
“(The Lotte Group owner family) regarded the group’s affiliates as their private possessions, and carried out the offenses for their own interests, without a rational decision-making process,” the court said in its rulings.
It acknowledged the charges of malpractice Shin Dong-bi faced, but cleared him of embezzling corporate funds.
Shin, 62, was indicted on charges of giving business rights to a company run by his sister, Seo and her daughter, wreaking 77.8 billion won in losses for the group’s affiliate Lotte Shopping.
He also faced charges of providing 49.9 billion won in illegal funds to its electronic banking affiliate Lotte PS Net.
In addition, he faced charges of evading 85.8 billion won in taxes in handing Japan Lotte Holdings shares over to his sister, Seo and her daughter.
He was suspected of handing a total of 50.8 billion won in corporate funds to his family members _ 39.1 billion won to his brother and 11.7 billion won to his father’s common-law wife and daughter, but was cleared of this charge.
Prosecutors sought a 10-year sentence and a 100 billion won fine for Shin. They sought a 10-year term and 300 billion won fine for his father, a five-year term and 12.5 billion won fine for his brother, and a seven year-term each for his sister and Seo.
Shin is also facing a trial for corruption in the influence-peddling scandal involving former President Park Geun-hye’s confidant Choi Soon-sil.
He is charged with providing 7 billion won in bribes to the Choi-controlled K-Sports Foundation in exchange for getting approval for a duty-free license for a business in Seoul.
Prosecutors are seeking a four-year jail term. The court will deliver its verdict next month.
Shin’s trial had drawn particular attention as his absence would hit the group hard amid its drive to innovate its business and deal with Lotte’s situation in China.
In October, Lotte launched a holding company to solidify Shin’s leadership and boost transparency in the group’s management.
The group has been facing difficulty with its business in China, due to retaliations over the deployment of a Terminal High Altitude Area Defense battery by Seoul.
It has been turning to new markets in Asia _ pursuing overseas projects worth 10 trillion won.
After the ruling, Lotte Group said it would push forward with its drive to solidify the holding company structure and carry out its overseas projects.